The Sourcing Category

Analyzing 2017 E-Sourcing Savings and Trends with Scanmarket

Last week I touched down in London to attend and speak at Scanmarket’s eSourcing Exclusive Summit. Scanmarket is a provider of strategic sourcing software and over the years has developed a particular expertise and customer following based on its reverse auction capability and formats. During the event, Henrik Balslev, senior vice president of operations for Scanmarket, gave a presentation on e-sourcing and reverse auction trends. I thought it would be valuable for Spend Matters readers to hear some of the data Balslev shared.

Nothing New Under the Sun: Taking an Advanced Approach to Supplier Diversity

supplier diversity

Growing up I remember hearing two phrases constantly: “There is nothing new under the sun” and “Numbers never lie.” Both statements I have found to be half-truths. Try telling dinosaurs, phone booths or the former milkman that nothing ever changes. People, things, ideas — all evolve. The time has come for supplier diversity to evolve, as well.

Terrorist Attacks Pose Growing Problem for Supply Chains Worldwide

Terrorist attacks on supply chains are on the upswing, according to a recent report from BSI, a provider of supply chain intelligence. The number of such attacks have increased 8.5% from last year, and the year-over-year increase in the proportion of terrorist attacks on supply chains versus all attacks has also risen, by 19%.

What Dodd-Frank Repeal? Companies Continue to File Conflict Minerals Disclosures

conflict minerals

The fate of the Dodd-Frank Act — including whether U.S. companies will still be required to trace their conflict minerals — may be up in the air, but many of them are nevertheless conducting audits and filing conflict minerals reports as before. In April, the acting chairman of the Securities and Exchange Commission (SEC) came out against enforcing Dodd-Frank Section 1502, which required companies to trace the origins of any tin, tungsten, tantalum or gold (3TG) used in their products and disclose whether these conflict minerals have been sourced from the Democratic Republic of Congo (DRC).

Geopolitical Supply Chain Risk is Knocking on Your Door — Here’s What You Do

Pop quiz, hotshot. There's a bomb on a bus. Once the bus goes 50 miles an hour, the bomb is armed. If it drops below 50, it blows up. What do you do? What do you do? For those of you too young to remember or too old to care, this quote from “Speed,” the summer blockbuster of 1994, delivered by Dennis Hopper’s character, pretty much sums it all up. (I admit, for this 11-year-old at the time, the adrenaline rush was palpable, and with no big Marvel-style special effects!) In a different summer rife with risk — the one we’re in — the quote rings especially true.

Oracle Procurement Cloud: Vendor Snapshot (Part 1) — Background & Solution Overview [PRO]

You can almost set your watch on it. When ERP vendors decide to enter a particular solution market, impassioned arguments debating the tradeoffs of their approach versus the perceived benefits of those taken by specialized application vendors turn up the volume on a regular basis. “To ERP or not ERP,” that is the question. And while Oracle’s Procurement Cloud has not yet settled this debate, the offering will continue to draw the attention of many companies as well as Oracle’s installed base during their respective source-to-pay (S2P) technology evaluation processes, especially as Oracle’s solutions continue to improve and mature in the area and take their place as cloud-native solutions, turning entirely away from the ERP installed software legacy.

This Spend Matters PRO Vendor Snapshot provides facts and expert analysis to help procurement organizations make informed decisions about Oracle Procurement Cloud and whether its capabilities are a fit for their needs. Part 1 of our analysis provides a company background and a detailed solution overview, as well as a summary recommended fit suggestion for when organizations should consider Oracle Procurement Cloud. The remaining parts of this research brief will cover product strengths and weaknesses, competitor and SWOT analyses, and insider evaluation and selection considerations.

Latest Modern Slavery Index Released: Turkey and EU See Increased Risk

No company wants its global supply chains to have any exposure to slavery. Yet new research shows that the risk is on the uptick worldwide, including in 20 European Union countries. Global risk research firm Verisk Maplecroft released its Modern Slavery Index 2017 on Thursday. The index assessed 198 countries for risk of modern slavery, which the researchers define as including slavery, human trafficking and forced labor. The percentage of countries at “high” or “extreme” risk for modern slavery has grown to 60%, a 2% increase since last year.

Can Procurement Save the Least Diverse Profession in the United States?

forced labor

The biggest change agent for the legal profession could be the as yet unspoken (rather than contractual) pressure from legal firms’ corporate clients, who are pushing their legal partners to go further into supplier diversity efforts. These corporations (e.g., HP, Facebook and Oracle), many of which have instituted their own supplier diversity programs, increasingly want their suppliers and partners to do the same, according to Lee Garbowitz, managing director of Procurement Managed Solutions for HBR Consulting. This helps the partners align strategically, with the ultimate goal of improving brand image and reputation on both sides.

How to Decide on Organizational Sourcing Structures, Supply Market Intelligence Sources (ICYMI)

category management

Last week, we ran two stories that have come out of our new feature, Ask Spend Matters. The feature asks readers to tell us what they’ve always wondered about procurement and supply chain, and our editors then select questions to pursue and investigate. While our first replies covered the intricacies of tail spend management and the use of big data in public procurement, last week we tackled two questions related to the sourcing side of procurement. Check out what your peers are wondering and be sure to leave us your own question!

Centralized, Decentralized or Hybrid Sourcing Structure: How Do We Decide?

Today’s Ask Spend Matters question came from Piyush Shah, a PhD student of supply chain management at Arizona State University: “Centralized, decentralized or hybrid sourcing structure? How do we decide?” This is a classic question and one that has sparked decades of passionate debate. Proponents of centralization point to the potential for higher savings. Defenders of decentralization argue that regional procurement teams can bring about better supplier relationships.

The easy answer is “It depends” or “A hybrid of the two.” But what does a hybrid structure look like? And how do factors like purchasing category, industry and stakeholders play into the assessment?

What To Expect from Best-in-Class Sourcing Optimization Technology and User Design (Part 4) [PRO]

spend analytics

We’ve often wondered why sourcing optimization technology is not more broadly adopted today alongside or as a replacement for traditional RFX and reverse auction approaches. One of the major reasons why procurement-led optimization efforts have not yet crossed the chasm (outside of transportation spend) is that because until recently, many solutions were challenging to use without considerable training. In addition, most of the technologies available were not effective enough “out of the box” at tackling anything but logistics sourcing opportunities or somewhat simplistic bids and constraints. And, of course, not enough procurement organizations were even aware of all of the benefits optimization can bring above and beyond standard software-driven strategic sourcing efforts.

But these hurdles are disappearing — fast. This Spend Matters PRO series is meant as a primer for both sourcing optimization solution “buyers” and solution “builders.” It provides a look at what is required to use and field a best-in-class sourcing optimization solution today from both a technology and user design capability. The three previous installments can be found here and here and here. As we conclude our analysis in Part 4, we consider the areas of constraint impact analysis, scenario generation and reporting/analytics.

Taking Inventory of Proactis and Perfect Commerce: Products, Strengths and Integration [PRO]

Proactis and Perfect Commerce share a number of commonalities, perhaps the three most important being that they have built out similar product footprints, have been able to grow “under the radar” in recent years and have leveraged M&A as a core growth strategy. We covered the news of the announced merger between the two firms last Friday on Spend Matters, and Proactis shareholders initially responded positively to the news.

As background, Proactis’ core source-to-pay (S2P) business has centered primarily on serving U.K. customers, with a concentration in public sector. In the U.K. market, Proactis has made a number of acquisitions in recent years to round out its suite and to acquire market share. These transactions include EGS (2014), Due North (2016) and Millstream (2016). Within the U.S., it acquired Intesource (2014), to strengthen its e-sourcing and related managed services capability, and Intelligent Capture (also 2014), a provider of electronic invoicing and scan/capture services.

Perfect has served customers in the S2P area on a global basis since its founding, in 1994, but with a greater emphasis, until recently, on North America. It has made a number of smaller acquisitions over the years, in addition to its foundational acquisition of Commerce One (2006), including those that leveraged IP enforcement of Commerce One code as a bargaining chip in various transactions. But more recently, Perfect made its largest acquisition to date purchasing supplier network and P2P provider Hubwoo, to help expand its market presence and enhance its capabilities in the catalog management, marketplace and supplier network areas.

This Spend Matters PRO research brief provides an introduction and an overview to both providers, exploring the value proposition and strengths each vendor brings to the combination, including overlap and potential synergies from a customer perspective. It also touches on the subject of integration, as well as the approach we would encourage customers to look for when determining whether the acquisition will primarily benefit them or investors.