The Purchasing and Sourcing Category

AI in Procurement Tomorrow (Part 3): Category Wizards Will Save Time, Add Strategic Muscle [PRO]

In this series, Spend Matters delves into the status of artificial intelligence, with a focus on how AI can improve the sourcing and procuring process. Today the technology is really “assisted intelligence,” which was detailed in our precursor series: AI in Procurement Today, Part 1 and Part 2). The technology of tomorrow promises the “augmented intelligence” that we are discussing in this series, as some vendors already have limited beta capabilities. In the first two articles, we discussed how tomorrow's systems are going to help considerably with overspend protection and how "ninjabots" can crunch data on buying and automatic opportunity identification. In this article, we'll consider “category wizards” and how they can put a halt to manual tasks — like defining/assessing categories and choosing the best procurement process — thereby adding strategic prowess for even the lowest of buyers.

So You Want to Build a B2B Marketplace: 8 Business Scenarios & Case Examples (Part 1) [PRO]

global trade

Just what is a B2B marketplace?

Ask someone like the “gray hairs” on the Spend Matters team who were advisers to first generation industry-based exchanges during the .com era (1999-2001) and they’d likely tell you it was a great theoretical concept to bring buyers and suppliers together in support of procurement and supply chain processes and/or transactional document exchange — albeit one that failed in execution just about every time. But ask someone who is younger and they might point to Amazon Business as an archetype of a B2B marketplace model today. Both would be right, of course.

But what is important for our purposes is that B2B marketplaces are back.

At its fall 2018 analyst day, the technology provider Tradeshift noted that 30% of its 2018 (revenue) bookings have come from “private marketplace” deals (i.e., not selling applications such as invoice-to-pay or e-procurement alone but buy-side and sell-side marketplace enablement).

But just what is a marketplace today — beyond pointing to Amazon Business as one example — and why do they matter? And most important, why would you, as a procurement organization or distribution/business intermediary, want to build one?

This Spend Matters PRO series provides insight into these and other questions. Part 1 of this series begins by segmenting the market into (and defining) eight business scenarios that the groups can enable to go beyond standard procure-to-pay or storefront/e-commerce enablement, which include both “private” and “public” marketplace models. These include Digital Trading Company (“buy/sell” models), Extended Bill of Material Orchestration, Group Purchasing Organization (GPO) and Distributor “Value Add.”

For each of the eight areas, we provide a summary description of the marketplace concept, technologies (off-the-shelf) that can enable it, selected vendor shortlists, best-fit industries that it can support and best-fit spend categories (if applicable).

Later installments in the series will provider deeper insight into the following issues: what you’ll need to build one, technology vendors to consider capable of providing marketplace technology/infrastructure (based on Spend Matters’ SolutionMap benchmark data), and whether a marketplace, for procurement organizations, is a substitute for traditional cloud-based source-to-pay applications.

Spend Matters is involved in technology strategy and RFI projects for organizations building — or evaluating building — marketplaces using “off-the-shelf” technologies. Contact us to learn more.

Coupa-Aquiire Deal Highlights Key Change: Marketplace E-Procurement Models Aren’t One-Size-Fits-All Anymore

marketing

Spend Matters’ recent coverage of Coupa’s purchase of Aquiire details Coupa’s acquisition rationale and the general wisdom of its decision — but the deal also calls attention to a useful context that evaluators of “Amazon-like” e-procurement systems would be well served to understand. As these systems are tailored for different industries, they should be evaluated for how they differ, not how they're the same. Let's look at three types of marketplaces spawned by the Amazon model.

Amazon Business Prime Updated: Analysis and Procurement Recommendations (October 2018 Update) [PRO]

AnyData Solutions

Earlier today, Amazon announced a host of enhancements to its Amazon Business Prime offering. To help procurement organizations understand the implications of these added capabilities, this Spend Matters PRO research brief provides an overview and analysis of the new solution components and offers recommendations to procurement organizations already using or considering Amazon Business.

The emphasis of this PRO analysis centers on the spend visibility/analytics, e-procurement (guided buying) and working capital/payment capabilities of the October 2018 Amazon Business release. While some of these areas are likely to be less interesting for organizations that already use a third-party e-procurement solution that integrates with Amazon Business (either via punch-out or API), Amazon’s enhanced invoicing, working capital and payment components can be applied to all potential users.

But perhaps most important, these enhancement offer some signals of how Amazon may continue to build out the capabilities of its Prime business solution. Let’s delve in.

‘Just Coupa It’: By Buying Aquiire, Coupa Targets Google-like Search and the End of Punch-Outs [PRO]

Coupa announced its latest acquisition Monday with its purchase of Aquiire, a provider of e-procurement and procure-to-pay software. The deal brings to Coupa’s business spend management suite — which now includes support for e-procurement, P2P, source-to-pay, travel and expense management, and services procurement — many of the latest features for front-end shopping and catalog management, particularly several patents related to real-time search and third-party-hosted catalog integration capabilities. Viewed as part of Coupa’s larger strategy, however, Aquiire is just one piece of a larger puzzle that Coupa has been trying to assemble for the last decade.

The purchase of Cincinnati, Ohio-based Aquiire, along with Coupa’s own innovations in the guided buying area and the company’s 2017 acquisition of Simeno, forms the basis of a shift away from one-to-one, proprietary “punch-out”-based B2B e-commerce models and toward a streamlined, almost touchless approach to finding and buying goods and services. This entails far more than creating a friendly user experience that’s “Amazon-like.” Coupa wants to go one step further, making the search for a corporate purchase as easy as answering a question with Google: one question (sometimes auto-suggested) into the box, numerous answers delivered within the next screen, in real time, prioritized by relevance, price and desired procurement controls.

Coupa’s goal is to make B2B purchasing as easy and reflexive as everyday information retrieval on the broader web. Said another way, when you need to know something, you Google it; when you need to buy something at work, you would Coupa it. Obviously, Coupa is not going to become a verb anytime soon on the scale of Google. The key is to provide a B2B buyer-relevant search that is tuned to the “persona” of the individual buyer to quickly get him or her the needed goods and services from the preferred supply sources and buying channels.

This Spend Matters PRO research brief explores the feasibility of the “Google-like” search concept, as well as how Coupa’s acquisition of Aquiire enables it. It also touches on how Coupa’s approach to front-end shopping enablement compares with the broader e-procurement market, as well as what this means for competitors.

Write Better RFPs: How to Get What You Want (and Need) From Suppliers [Plus+]

RFP

The typical business challenge when you go to market with an RFP centers on getting ideas for what is possible, and identifying suppliers that either already have these ideas or are willing to work with you toward that end. Targeted activities are often services or complex products where quality, service or the engineered final product will be different from each vendor responding. We've put together some fresh ideas to an old challenge: conveying your needs in ways that a supplier can relate to and that encourages them to put their best foot forward, with a proposal that goes beyond your wants and addresses your needs, as well.

12 Ways E-Catalogs Can Enhance Your E-Procurement Mojo [Plus+]

E-catalogs (catalog management) are a key part of any e-procurement solution. For e-procurement, catalogs provide more than just a list of items. They enable the loading of prices, and they enable features of products and services to be approved and integrated into an e-marketplace in order to purchase against.

Catalogs are a living, often-changing and integrated source of information (within a single database) that enable all purchasing scenarios. Combined with the support of a robust e-marketplace — advanced search engine; advanced purchasing mechanisms such as e-forms, lists, kits, etc.; a powerful workflow engine and flexible system integration capability — they provide key support for buying requirements.

As I’ve been known to say, I consider e-catalogs the “fifth element” of procurement. “The fifth element” comes from the eponymous 1997 fiction action film starring Bruce Willis and Milla Jovovich. In the movie, earth is considered "north," fire is "south," air is "east," water is "west" and the fifth element is the "spirit" or "soul” — the "spiritual force" that earth, air, fire and water descend from.

Although they may not be truly spiritual in nature, I think that e-catalogs are a sort of hidden force that breathes new power into broader e-procurement. In this Spend Matters Plus brief, we give procurement practitioners 12 ways e-catalogs can do just that.

Need an e-procurement and invoice-to-pay primer before reading or subscribing to Plus for the first time? Download this free report.

Ethical Sourcing: Do Consumers and Companies Really Care?

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Do people really care about ethically sourced goods? Some reports say consumers do, while other research shows it doesn’t actually change shopping habits. For companies and supply chain organizations, ethical and sustainability efforts are often linked to business factors like reducing costs and improving brand image. We take a look at how ethical sourcing is shaping the way products are produced and sold today, and if it’s having an impact on what people are actually purchasing.

How I Spent Oktoberfest Going to School on German Procurement Practices

German procurement

A few weeks back, I had the good fortune to spend two days in Munich during a time that just happened to coincide with Oktoberfest. Of course, there was absolutely no relationship between the visit and the festivities at the time. And getting into a small “tent” — part of the activities with the Volksfest if you have the right friends — together with some colleagues from a startup in town was a complete coincidence as well. Or, that is what I tell my wife at least.

Taylor Swift’s Lesson for Procurement Professionals

Spend Matters welcomes this guest article by Vengat Narayanasamy of GEP.

Most of us are aware that Apple Music is offering a three-month trial to anyone who signs up for the streaming service. Apple negotiated numerous agreements with music companies to provide this service, and in the agreement it was mentioned that the artists and music companies would not get paid for the music streamed during this trial period. As anyone would imagine, Apple had a leverage to get away with it; however, Taylor Swift decided to call it out in an online letter this summer titled, “To Apple, Love Taylor.”

Services Sector Growth Slows Amid Global Economic Contraction

Tianjin

Growth in the U.S. services sector slowed in September, driven largely by a softening retail market and weakening of the global economy, the Institute for Supply Management reported this week. ISM’s latest Report on Business showed the non-manufacturing index (NMI) registered 56.9% last month, down 2.1% from August. In a conference call with reporters on Monday, an ISM official pointed to contractions in the mining and retail industries, as well as economic activity both domestically and globally for the slowdown in the services sector.

Stages of a Global Sourcing Strategy

Spend Matters welcomes this guest article by Shruti Agrawal, director at Excella Worldwide.

Global product sourcing refers to a procurement strategy through which an enterprise works to identify the most cost-effective location for product manufacturing, even if that location may be in a foreign country. The general sourcing process can be divided into the following 5 stages, as we explain in detail.