Requisition / PO Management Content

3 tips to improve the ‘first mile’ of your supply chain

Overhauling how your business manages its supply chain is a daunting task, but a good starting point is to look at a segment of the supply chain and focus on three tips: clean your data to improve visibility, automate supplier collaboration and consider what new technology is available to you to make these things happen.

The specific part of the supply chain that many organizations would benefit from focusing on is the “first mile” — when businesses set a solid foundation to work with suppliers, engage services and order direct materials. In our previous article, “How ‘first-mile’ flaws hinder last-mile success,” we discussed the problems that snowball, add to risk and cut into margins.

Now, let’s dig into the top three tips for addressing these problems:

How ‘first-mile’ flaws hinder last-mile success

Businesses want and need to deliver for their customers, and that’s often done by putting a ton of thought and effort into the last mile of the process to ensure success and customer satisfaction. But, while getting products and services to customers is vital, it’s not the first step.

For that, we need to focus on the first mile — that time in any company’s supply chain process where you can set a solid foundation to work with suppliers, engage services and order direct materials. The first mile is just as important as the last mile for meeting customer commitments, and it’s even more important when it comes to maximizing margin, managing inventory and recognizing revenue.

To succeed, you’ll need to improve your processes by implementing a digital transformation. That involves more than using digital forms instead of paper. To truly transform, real-time data and visibility need to be at the heart of how your company runs. Problems in the first mile need a modern solution.

Mastercard Track: A Gateway to a New Kind of B2B Ecosystem (Part 2) — SWOT Analysis and Market Implications [PRO]

Over a decade ago, American Express led the payments way in making innovative investments aimed at procurement organizations and their suppliers, primarily through its venture and partnership arms. (Remember MarketMile/Ketera, anyone?) But more recently, it appears that Mastercard has picked up the B2B innovation mantle, opting to organically build a solution aimed at buyers and suppliers with procurement front and center in the business case crosshairs. This new solution, Track, surprised us in multiple ways (click here for an introduction to Track), especially for its audacious supplier network vision (and we might add also for what it is not doing, at least not yet).

Is the tail of Mastercard’s new supplier network offering — comprised of a trade directory, supply risk monitoring capability and payment ledger — wagging the payments dog? The answer might surprise you. This purebred procurement solution can hunt without even hinting at the need to enable a virtual or corporate card swipe.

Indeed, with its new Track solution, Mastercard appears quite serious about the procurement and supplier management market beyond just finding creative ways of leveraging its rails to enable payments. With this new product release, Mastercard stands in contrast to American Express, among others, which still appears to be taking the same old B2B payments and financing pooch out for a walk, albeit with an updated veneer for the digital working capital era.

But before we drown in our doggy metaphors, let’s analyze what’s good — and what’s not so good — about Mastercard’s first generation Track release and what it means for procurement organizations, supporting services providers (e.g., consultancies) and the procurement technology sector as a whole.

Mastercard Track: A Gateway to a New Kind of B2B Ecosystem (Part 1) — Vendor Introduction and Solution Overview [PRO]

B2B payments represent a significant opportunity for payments providers. Within the U.S. alone, Deloitte research suggests that B2B payments are expected to reach $23.1 trillion by 2020, following a 5.8% CAGR since 2014, with large enterprises accounting for more than 60% of all transaction volume. Financial institutions, however, have placed comparatively less emphasis on the B2B space in favor of B2C transactions, which in spite of their smaller relative total size present less complexity in terms of technological and process problems to solve. Yet this is beginning to change. Banks, payment providers and other institutions are doubling down on the opportunities in B2B, and some are even starting to get their foot in the door by offering software targeted toward procurement organizations. For example, Mastercard has been rolling out its new Track solution in partnership with major banks and P2P and S2P suite providers and via public demonstrations at vendor conferences like Basware Connect and Ivalua NOW. Following the integration of Track’s payment capabilities with Singapore’s Networked Trade Platform (NTP) last year, Mastercard is getting its procurement technology start in, of all things, supplier master data and risk management. This may seem like an odd fit, especially when there are other technology providers offering similar — or in some cases, far more sophisticated — tools for managing supplier data and tracking third-party risk. As many B2B “old timers” know, banks and payment networks (Mastercard included) have been trying to insert themselves into P2P processes for nearly 20 years, and the results have been a failure every time, because they were always about funneling the transactions to their payment networks in order to charge suppliers 2% to 3% processing fees. This relegated these initial efforts to tail spend and highlighted how they couldn’t add value to the broader S2P process.

But we think this solution from Mastercard actually has huge potential and will likely be a market disruptor. Why? Well, from a practitioner standpoint, what would you think of a vendor who took all your supplier master data and then ran it through its “magic engine” and then showed you all the duplicates and supplier risk warning flags — and they did this on a freemium basis? That should catch your attention. And it should catch the competitive attention of D&B, LexisNexis, supplier networks, supplier risk/intelligence providers, supplier discovery tools and others that play in this space, as well as the partnering attention of S2P application providers that want an instant supplier network partner that can do more than process low-dollar transactions on a payment network.

Mastercard is just starting the first act of a longer, platform-based play, and the question today is simple: Is this “priceless” MDM and supplier risk solution worth a look? The answer is a resounding “Yes!” Because unlike other services in the space, Track takes the long view, supporting Mastercard’s aspiration to enable and connect into a global B2B ecosystem of multiple services, from business identity and risk management to payment facilitation and trade finance. And while we expect many of Track’s initial capabilities and partner offerings to evolve over time — what Mastercard has been publicly demonstrating over the past several months is more of a minimum viable product than a fully matured and battle-tested solution — the first cut is worthy of a deeper dive.

This Spend Matters PRO Vendor Introduction offers a candid take on Mastercard Track and its initial capabilities. Part 1 includes an introduction of Mastercard’s offering and a breakdown what the solution can (and can’t) currently do. Part 2 will provide a SWOT analysis and our key recommendations to interested parties (procurement organizations, technology providers, supporting services providers) evaluating Track as encountered through partner P2P or S2P providers.

Exploring Basware’s Recent Product Enhancements: Something for AP and Procurement (Part 1) [PRO]

In April, Basware held its Customer Connect user event in Chicago. During a mainstage talk and break-out sessions, the procure-to-pay provider highlighted a number of recent enhancements and product roadmap areas, including the continued incorporation of artificial intelligence (AI) throughout its product line. Based on these presentations and recent Spend Matters SolutionMap RFI analysis, this three-part Spend Matters PRO brief highlights selected recent product enhancements as well as what Basware has in store for AP and procurement customers in the quarters to come based on its product roadmap. It also provides deeper insight into how Basware is embedding AI across its procure-to-pay solutions.

The following enhancements are covered and analyzed (with key takeaways included) in this research brief:

— Approval Confidence Scoring/Index
— Committed Spend
— SmartPDF (Basware’s version of InvoiceSmash/Cloudscan)
— Payment Plan Compliance
— Intelligent Order Aggregation

SourceDay: Vendor Introduction, Analysis and SWOT [PRO]

The broader procurement technology market has always had a tenuous relationship with the direct procurement technology solutions. Old timers may remember SupplyWorks from the early 2000s, but it folded — and the SupplyWorks brand name now belongs to a janitorial/sanitation service provider (we won’t go down the easy joke paths on this one). More recently, DirectWorks, a perfectly decent solution for direct materials sourcing, also struggled until getting picked up by Ivalua.

Part of the challenge is that direct procurement is not only a subset of spend but also a superset of processes, because it’s essentially infused into the broader supply chain. This makes it addressable from multiple solution sectors like SCM apps, supply chain networks, integration players and industry players.

Source-to-pay application suites, for their part, are picking off some low-hanging fruit functionality here, but the broader requirements are spelled out well in our coverage of a distinct segment that may be forming for direct materials procurement solutions.

Manufacturers today are slowly seeing an expanding set of purchasing tools beyond ERP and MRP alone, and choice is generally a good thing if you have your overall solution strategy/approach nailed down before you go tool shopping. Many will be more than happy to explore this new market.

One of these newer choices is SourceDay, an Austin, Texas-based vendor that directly integrates with ERP and MRP systems to automate the management of purchase orders and supplier performance. By providing a more usable and procurement-centric layer over the data housed by a legacy ERP or supply chain application, SourceDay takes on many of the problems that procurement organizations find in managing direct materials spend.

The result is that procurement can save time, reduce errors and systematically manage supplier performance from a common cloud or mobile interface while still claiming the benefits that an ERP system can offer. There are obviously caveats to this statement — namely around integration — but we’ll touch on this later.

This Spend Matters PRO Vendor Introduction offers a candid take on SourceDay and its capabilities. The brief includes an overview of SourceDay’s offering, a breakdown of what is comparatively good (and not so good) about the solution, a SWOT analysis and a selection requirements checklist for companies that might consider the provider.

WPS Management (Wescale): Vendor Snapshot (Part 1) — Background and Solution Overview [PRO]

Wescale is the broader “procurement umbrella” and new open business integration platform of WPS Management, a provider that traces its roots to 1997 with the creation of Wallmedien AG, one of the first e-procurement solutions for the SAP environment in Europe. We’re sorry if this sounds confusing (it is). But what matters is that since its founding, Wallmedien AG has managed to grow its core business in e-procurement while also adding additional capabilities through its affiliated businesses and product lines, including WPS4/Procure, Meplato and recently Wescale.

Wescale is the platform through which all WPS Management solutions are integrated. WPS Management (branded as Wescale) has participated in the Spend Matters E-Procurement SolutionMap, competing with specialists such as Vroozi, BuyerQuest, OpusCapita (jCatalog) and others with similar platforms like Basware, Tradeshift and Determine (now Corcentric).

This three-part Spend Matters PRO Vendor Snapshot uses facts and expert analysis from Wescale’s participation in the 2018 SolutionMap to help procurement organizations make informed decisions about the broader umbrella of capabilities this provider offers. An update will be published this summer, based on Wescale’s latest 2019 capabilities.

Part 1 of our analysis provides a company background and detailed solution overview, as well as suggestions for when organizations should consider the Wescale platform. The remainder of this multipart research brief covers product strengths and weaknesses, competitor and SWOT analyses, user selection guides, and insider evaluation and selection considerations.

What the Heck are Companies Buying When They Purchase Accounts Payable Technology?

Spend Matters recently ran two surveys (one to procurement/finance practitioners and one to technology providers) in preparation for the launch of the Spend Matters Accounts Payable Automation SolutionMap later in 2019. Many of our questions focused on how users and providers define the bounds of AP automation solutions since there is often a disconnect even within the vendor community — let alone the user community. Accounts payable technology covers many business areas, so the market for the solutions is confusing. It's hard to compare them apples to apples.

SourceDay Gets $6.5 Million Investment for Its Direct Spend Solution

procurement software

Procurement software provider SourceDay on Wednesday announced it has received $6.5 million in Series A funding from three capital venture firms. SourceDay said it has now raised $10.8 million since the 2015 launch of its software-as-a-service cloud platform, which automates direct spend management, purchase order management and supplier collaboration. The provider integrates its solution with ERP systems to reduce manual operations for suppliers and buyers, the statement said. The Austin, Texas-based company plans to focus on product development as well as expand its sales and marketing activity, it said.

AI In Procurement Tomorrow (Part 2): Ninjabots and Augmented Intelligence [PRO]

In this series we are discussing artificial intelligence, with AI touted by many a salesperson. Virtually every vendor is claiming AI, even though it’s a stretch to promote having a fully functioning model. However, if you are willing to settle for “assisted intelligence,” that AI exists today (as per our precursor series that you can read here: AI in Procurement Today, Part 1 and Part 2), and it won't be long before we have the “augmented intelligence” that we are discussing in this series, as some vendors already have limited beta capabilities (that are typically restricted to a subset of categories) in many of these areas. In our last article, we discussed how tomorrow's systems are going to help considerably with overspend protection. In today's article, we'll consider “ninjabots” and dive into invisible buying, automatic buying and automatic opportunity identification.

How to Hack Your ERP and Create Competition for P2P Suite Providers

Spend Matters welcomes this guest post from Doug Hudgeon, a business automation expert.

P2P software is painful to buy and painful to implement. In order to get the biggest benefit, you need to rip the purchasing spinal cord out of your company and replace it with an end-to-end P2P system. This is a big project, requires a big budget and, if you are going to deliver on the promised benefits, you must have an unwavering commitment to change. Sales cycles are long but, fortunately for P2P vendors, the margins on the deals that do get across the line can be pretty good. But the competitive landscape is about to shift.

6 Ways To Really Mess Up Your AP Automation Project

Spend Matters welcomes this guest post from Melissa Hendrick, VP of marketing at Yooz North America.

Today, automation technology is one of the inevitable trends for companies wanting to improve their efficiency and agility in a complex economic environment. The reasons are clear: cost reduction, process optimization, data security, regulatory compliance and many more.

If you are considering automating your invoice payment processing workflows in accounts payables, or are already investigating solution providers, your success will be based on following some basic guidelines and avoiding some common pitfalls.

With that in mind, here are some insights to help you identify the pitfalls on your journey to AP automation, combining practical information with a little tongue-in-cheek humor.