When it comes to cost savings, procurement organizations can make the mistake of looking too hard and focusing on the same approaches for finding purchased cost savings. This will not yield optimal results. Pierre Mitchell, chief research officer and managing director at Azul Partners Inc., presents: Spend and The Art of Cost Reduction, now available for complimentary download. Claim your copy here.
Category Archives: Spend Management
Governments at every level constantly collect enormous troves of data, but how to use it, and specifically how to ensure that data is feeding the correct metrics to measure your procurement performance, has been an ongoing struggle for the public sector. We’ve heard this time and again from readers and members over at Public Spend Forum, so we’re hosting a free webinar titled “Procurement and Spend Analytics – Key to Driving Value” on Thursday, May 12, from 1 p.m. to 2 p.m. EDT. Professor Joseph Sandor from the Broad College of Business at Michigan State University will kick it off with an introduction to spend visibility, and then our sponsor BravoSolution will present a case study in which one of its public sector clients greatly improved its performance by improving its analytics.
It's true that analytics is one of the core competencies for your procurement organization. While most analytics (i.e., spend analysis) have traditionally focused on reporting what has already happened, we think the more valuable analytics center around what will likely happen and what needs to be done in order for that to happen. Pierre Mitchell, chief research officer at Spend Matters, has more in this complimentary research brief, The Future of Procurement Demands Smarter Spend Analytics: Here's Why. Claim your copy here!
Spend Matters welcomes this guest post from Paul Blake, of GEP.
Sometimes the certainties in life can suddenly seem anything but. We’re not talking here about the classical “death and taxes” certainties attributed to Benjamin Franklin, but those things known to be “just so,” turning out to have a surprising degree of fuzziness about them. Take the geometry we all learn at school. Despite however many intervening years there may be between school days and the present, I’d wager a good percentage of procurement professionals could still offer an instant answer when asked for the formula for how to calculate the circumference of a circle.
With current energy markets being at a 10-year historical low, how can you capture the value created by this environment and incorporate it into a comprehensive strategy? Joing Insight Sourcing Group’s Tommy Greer and Spend Matters’ Pierre Mitchell for a webinar that will discuss how high-performing procurement organizations are managing their energy spend and the top four ways that you can drive down energy costs. Register today!
Coupa has acquired cloud-based contract management solution provider Contractually. Terms of the deal were not disclosed, but Spend Matters believes this was not a substantial acquisition in financial terms. From a capability perspective, however, the acquisition appears clever on multiple fronts, even if Coupa is not acquiring a standalone contract lifecycle management (CLM) provider. The acquisition adds collaboration and authoring capabilities that reduce contract risk, reduce errors and increase efficiency.
Marketing is all about generating demand for the organization’s products. Thus, value to marketing is any activity that has the potential to increase demand. The primary activity marketing undertakes to increase demand is advertising. This activity is primarily accomplished through contracting agencies with the creative talent (the “magicians”) that marketing believes has what it takes to produce the magic that will increase demand with the fresh and innovative campaigns and messages these creative types will generate. Thus, a big part of marketing is agency management. Often the greatest value that procurement can bring marketing, at least in marketing’s view, is any process, methodology, technology or resource pool to help marketing better manage its agency relationships. If marketing already thinks those relationships are good, procurement can still help foster more successful agency relationships. How will procurement accomplish this? In this installment of our six-part Spend Matters Plus series, we take procurement practitioners through how to clarify and pitch the value message of certain management processes for marketing, ultimately helping marketing close the loop between what was created and what was delivered.
Spend Matters welcomes this guest post by Lars Ola Petters, CEO of Palette.
Being a maverick can sometimes be good in business, but not when it comes to procurement. Maverick spending is a major challenge for finance professionals, with recent studies showing that, on average, one-third of all purchases in organizations are made without the knowledge of the procurement department.
How best to connect with the marketing team? As a procurement professional, you probably hear this over and over again from bloggers, analysts, consultants and even vendors who stress that a new initiative will not be successful without executive support, and engaging with marketing is no different. Even if you talk the talk and walk the walk (as we analyzed in the first part of this series), and come bearing great suggestions to address marketing’s value drivers and increase the overall return from the marketing spend (our point in Part 2) — even if you can use this newfound knowledge to get marketing to lower the drawbridge and invite you into the foyer, it doesn’t mean the wizards of wondrous words are going to take you seriously or invite you back to dine in the great hall. One has to remember that marketing has a right to be cautious, and maybe even distrustful, of your new value-generation messaging because the last time procurement came knocking, it was to cut costs, which is not necessarily beneficial to marketing. Thus, it’s only reasonable that they would want some c-suite assurance that this time it’s different. So how do you get the right executive support? That’s what we’ll tackle in our third installment of this Spend Matters Plus series.
Much like packaging, logistics and maintenance, repair and operations (MRO), the marketing spend category straddles the boundary between direct and indirect. And we all know that it has a substantial impact on sales and revenue — allegedly, at least. The reality is that, while every marketing dollar spent can have a huge impact if spent appropriately, the direct commercial impact is notoriously difficult to assess, and the value per dollar spent even more difficult to quantity. However, organizations can no longer afford to ignore this “sacred spend cow” category, as every dollar spent needs to count in an inflationary market. Marketing needs procurement to squeeze every penny of value out of agency spend to not just lower total costs but also maximize revenue uplift and brand enhancement. However, this won’t happen as long as a moat separates procurement from marketing. Thus, in this series, we have distilled the approaches and practices we’ve seen adopted by leading practitioners and present a step-by-step plan to help procurement gain marketing’s ear, trust and support in helping marketing manage its spend for maximum performance. In this first installment, we break down why you need to walk the walk, talk the talk, get educated and “live the marketing life” — all of which should help loosen marketing’s drawbridge and ease it down across that moat.
In the previous three installments of our miniseries on spend compliance, we introduced an overall framework for spend compliance analytics and then dove into contract compliance, payment compliance, budget compliance and process compliance. In this edition, we’re diving into supplier compliance and how to unlock some latent value there. We’ll assume you’ve already done some basic spend analysis to identify when you’re paying different prices from the same supplier for the same item, but obviously supplier compliance runs deeper. How? Read on.
In the last installment of this miniseries, we explored spend compliance through the lens of contract compliance, payment compliance and budget compliance. In this edition, we dive into the topic of process compliance. If you can create smart controls in the right processes, you can eliminate the most frequent root causes to spend non-compliance. Since the source-to-pay process has three concurrent value streams of cash, information and the physical goods and services, there are multiple ways that incorrect process management and information can impact spend performance and value chain performance. So, follow the process errors, and you’ll follow the money left on the table. Let’s take a look.