Category Archives: Spend Management

Putting Procurement’s Personality to The Test

--Colored-Pencils-1007131E81344B3C copy What’s the dominant personality archetype for a chief procurement officer – or a procurement professional more generally? To find out, I’m collaborating with the Institute for Supply Management to perform a snap poll that simply asks procurement practitioners about their personality profile. The 3-4 minute poll is simply the 4 personality traits and some demographic questions. Check out the survey here.

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Procurement Doesn’t Manage Indirect Spend – Suppliers and Stakeholders Do

- March 3, 2015 9:01 AM | Categories: Procurement, Services and Indirect Spend, Spend Management

dollar wallpaper One of the toughest challenges for procurement organizations tasked with managing indirect spend is that they don’t do it – their suppliers and stakeholders do. Consider the sometimes limited visibility procurement has into demand, pricing, contracts and related areas for indirect spend, especially those that are managed and/or negotiated at a decentralized level in the business. In addition, procurement often lacks the same level of understanding of the physical and financial supply chain flow for indirect material that they do for direct.

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Deem: A B2B Phoenix Rises Once Again

1A0499C042 Deem is a B2B phoenix. Leveraging a platform-as-a-service (PaaS) strategy a decade before anyone knew what PaaS was, Deem rose to fame but succumbed to the lures of custom development – in part by accident, as its customers and board members coerced it in this direction – on its platform along with unexpected legal nastiness following an acquisition (Ketera). Having risen from the ashes and refocusing on the end user with a proven corporate travel product increasing P2P capability and a broader set of procurement technology assets that tie back to the original PaaS vision, Deem is poised to inject both new competition and ideas into the SMB, mid-market and enterprise markets in 2015 for managing, directing and controlling corporate spending. This Spend Matters PRO analysis provides history and context behind Deem’s challenges in the market and how it tackled them to bring its current suite of spend and expense management products to market – including the evolution of the acquired Ketera product set.

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Procurement Helping Reduce the Cost of Insurance Claims

- January 27, 2015 2:02 PM | Categories: Guest Post, Spend Management

The claims department is the heartbeat of every insurance company, but it also is the largest expense. It is normal for up to 80% of total premiums collected to be spent on claims payments and the costs associated with settling these claims. If an Insurance company can reduce their claims costs, it can provide them an excellent competitive advantage over the competition. However, there’s a fine line between reducing your claims expense and ensuring that your policyholders have a positive claims experience.

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Catching the Central Procurement Unicorn

- December 11, 2014 2:11 PM | Categories: Procurement, Spend Management

Spend Matters welcomes this guest article from POD Procurement. It is widely believed that achieving aggregation of an organization’s spend requires centralized procurement. This is incorrect. Achieving aggregation requires individual demand used collectively to secure higher supplier discounts. We will now explain the subtle but important difference.

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Focusing on Efficiency with the AT Kearney 2014 ROSMA Benchmark Report

- November 19, 2014 6:29 AM | Categories: Analysis, Learning / Research, Procurement, Spend Management

Earlier this week, we began our series analyzing the new AT Kearney 2014 ROSMA Benchmark Report, “Building the Brand of Procurement and Supply.” I first talked about the context and how the report analyzes ROSMA’s scores. Then, in a Plus post, I dove deeper into our analysis of the report, and I shared some of its highlights. Today, I’ll talk efficiency – what firms are the most efficient and why.

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Where M&A and Procurement Intersect – Accenture Spend Trends Q3 2014

- November 19, 2014 2:24 AM | Categories: Analysis, Spend Analysis, Spend Management

1382905346986fy The macroeconomic outlook in the quarterly Accenture Spend Trends Report is unfortunately likely to fly above the heads of many of those for which it was intended. Chief procurement officers (CPOs) and other executives – as well as the next generation of analysts and category managers – are likely to appreciate every word of it (as do we)! But few old school buyer and supply chain types enthusiastically or proactively follow GDP price trending, sentiment indicators and the like. However, at least the heart of Accenture’s category analysis will apply to them.

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Results and Additional Analysis of AT Kearney 2014 ROSMA Benchmark Report

- November 18, 2014 6:45 AM | Categories: Analysis, Learning / Research, Procurement, Spend Management

In the previous installment of this series, I outlined the background and approach for the 2014 AT Kearney Return on Supply Management Assets (ROSMA) benchmark report that can be found here. In this installment, I’ll not only highlight some interesting learnings, but also even enhance the analysis a bit based on the data in the report. The report highlights the basics of the ROSMA model, but I wanted to show a complete model that illustrates the mechanics of it a little more deeply.

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Don’t Put the Veil on Your Tail (Spend)

- November 11, 2014 2:36 PM | Categories: Guest Post, P2P, Spend Management

In today’s day and age, procurement folks have to be vigilant about their spend. The spend in question here is the strategic big dollar spend, for the simple reason that higher the spend, higher the savings when negotiated well. In some cases, while concentrating the efforts on the big savings, we let go of the small dollar spend. One should look at the top 5 spend categories. Miscellaneous items may not stand out in the large chunk of data, but when cumulated, they result in a chunk of money (to the effect of about 15-20% of total indirect spend) and may result in the top 5 categories of spend. More often than not, these have been put under a veil far too long. From my experience, here are some of the simple steps and strategies that one could look at to effectively manage this tail spend...

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50 Shades of Pay – Shade 9: The Magic Cube (Analyzing it)

- November 11, 2014 6:23 AM | Categories: Spend Management

In Part 1 of this Shade 9 Plus article, we discussed building your “spend cube.” Now that you have done that, the real fun begins: finding savings opportunities! Certainly, finding sourcing savings is where most start. The most popular analysis of course is evaluating spend fragmentation within a category across suppliers at the enterprise level, the regional level, the cost center level, the business unit level and so on. Since there is so much information out in the public domain (and from providers) on various spend reports that you can run off of this spend cube (e.g., including time as another dimension to support multi-period spend trending), we won’t re-invent the wheel, but do want to make a few points...

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50 Shades of Pay – Shade 9: The Magic Cube (Building it)

- November 10, 2014 6:39 AM | Categories: Spend Analysis, Spend Management

In this installment of our 50 Shades of Pay series, we finally dive into some of the gory critical details of building out the “magic cube” of spend visibility. Actually, it’s not that magical, and it can be more than 3 dimensions, but let’s keep it simple for now. The cube provides the data to answer the question, “How much did we spend on what with whom?” What we’re focusing on with this installment in the series is getting the data “on what” by classifying line-item level detail data into a spend category taxonomy.

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Webinar Recap: How Catalogs Benefit The Sourcing Process, Lead to Savings

OLYMPUS DIGITAL CAMERA A couple of weeks ago, we had a very interesting webinar about the evolution of catalogs and their benefits in the sourcing process to realized savings. Laura Lee, VP of procurement at CEMEX, joined us for the event, as did Pierre Mitchell, chief research officer at Spend Matters, Jessica Warren from Hubwoo and myself (from Spend Matters México y America Latina). One of the things that grabbed my attention was the number of participants that registered for the webinar ­– over 400. Seems that this is an important topic for practitioners.

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