The Spend Management Category

A Critical Look at Category Management (Part 3) [Plus+]

We wrote in the last article about the standardised nature of category management process and practice, and the dangers inherent in approaching different categories via that standard approach. Now let’s consider another failing of much “traditional” category management methodology and philosophy. We might define this as an overly procurement-centric approach to the whole task in hand. The buyer is placed in an almost deity-like position, controlling the whole process and with other participants fitting into their scheme and doing what they are told to by the all powerful category manager.

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Here’s Why You Should Conduct Price Benchmark Analysis for Every IT Purchase or Renewal

If you remember nothing else about this blog post, remember this statistic: 5%. Those are the odds that enterprises are paying a fair price for any given IT purchase or renewal if they are not performing IT price benchmark analysis. In the first half of 2018, only 5% of the IT purchase quotes reviewed by NPI were priced at fair market value based on market benchmark comparisons. That number is dangerously lower than what it was just a few years ago when “fairly priced” IT purchases and renewals hovered around the 30% mark.

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A Good Spend Culture Is Not Just About Saving vs. Spending

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At the Procurify office in Vancouver, #SpendCulture is a tongue-in-cheek phrase that sometimes gets tossed about when we see someone being particularly thrifty. It’s ironic that we’d assign that meaning to the phrase when our own spend culture is very much focused on investing in rapid growth and creating an agile environment where we prioritize keeping our team comfortable, motivated and well resourced for continual development. Our office in Vancouver is located in a prime downtown location. We have a kitchen well stocked with snacks (including cider on tap) and dedicated space for video games (including a VR station), among other perks. To some business leaders this seems like the opposite of a good spend culture. We would humbly disagree.

The Path to World-Class Spend Management: Identifying an Ideal Solution Partner

No organization wants to practice merely average spend management. But as business becomes increasingly more complex, achieving world-class or even superior results has become more challenging, too. Attaining better spend management outcomes will, of course, require organizations to use modern software solutions in this digital era. Yet while software is a necessary condition to improved spend management results, to achieve world-class results requires more than technology alone. Procurement organizations have begun to recognize this. They are becoming less focused on software features and functions and are expecting more. They want a partner that is focused on outcomes and bottom-line results, one that actively participates in the delivery of those outcomes or even owns and guarantees them. Here's how to identify such a partner.

Tail Spend Management in the Trenches: Lessons Learned and Questions Answered [PRO]

purchasing

Spend Matters recently hosted a webcast exploring how Owens & Minor revamped its tail spend management strategy using Simfoni, a procurement solutions provider with specialized capabilities in this area. This Spend Matters PRO brief shares the detailed learnings — including segmentation approach, KPIs and ROI elements — and Q&A conducted during the session to aid procurement organizations in their own efforts to tame the tail.

(For those who want a full download of the webcast, which features Owens & Minor-specific data and screenshots of Simfoni’s tail spend system, check out the on-demand replay.)

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Can Spend Actually Influence Revenue? Here’s Why Your CPO Will Be Your Next CFO

In 2017, Parsa Saljoughian, vice president of Institutional Venture Partners (IVP), set about the monumental task of analyzing each and every shareholder letter that Jeff Bezos had published since Amazon went public in 1997. In the course of studying the 20 letters, Saljoughian made a curious discovery: Bezos doesn’t seem particularly fond of the word “revenue.” In the course of those 20 years, Amazon increased its revenue by 120,000%, and yet “revenue” is mentioned only 12 times in those 66 pages of letters. Instead, writes Saljoughian, Bezos used these shareholder letters to talk at length about the company’s “inputs,” referring to aspect of the company's business that were controllable, such as spend management.

The Healthcare Group Purchasing Organization (GPO) Landscape: Background, History and Introduction (Part 1) [PRO]

This Spend Matters PRO research series provides both an insider’s take on the healthcare GPO market from an industry perspective and an “outside-in” analysis of the market based on norms in the procurement industry overall. For an introduction to GPO models not specific to healthcare, including how they work and ways in which the GPO landscape is changing, see An Introduction to Group Purchasing Organizations (GPOs) and Group Purchasing Organizations: Supplier Perspectives and the Evolving GPO Landscape

Part 1 of our coverage provides background, history and definition of the healthcare GPO market. The remaining installments will provide insight into how consolidation (both within healthcare systems and within GPOs) is affecting the market, lessons from other industries and an analysis of the “Big 3” national GPO providers: Vizient, Premier and HealthTrust.

We will also provide a summary of GPO criticisms — including those that are fairly levied and those that are not — and provide a perspective on what changes that we might expect as the GPO landscape evolves. Put on the flak jacket (or should we say take an intravenous sedative) and let’s delve in.

5 Reasons to Bet For and Against Coupa (Part 2: The Blindsided Prince) [PRO]

Owing to its focus on “business” spend management and public company status, Coupa continues to serve as an ambassador and proxy for the procurement technology sector overall. As I noted in the first installment of this series — 5 Reasons to Bet For and Against Coupa (Part 1: The Virtuous ‘Cloud’ Prince) — it seems everyone has an opinion on Cramer’s new “Cloud Prince.” I shared five reasons I’d bet on Coupa from a procurement (not capital markets) perspective.

Today, to balance things out, I turn negative and introduce five reasons I’d bet against the firm, primarily revolving around how the sector and procurement, finance and supply chain may change around it. I’ll lump these reasons under the theme as “blindsided prince,” since I believe Coupa’s biggest risks come from outside, not within.

5 Reasons to Bet For and Against Coupa (Part 1: The Virtuous ‘Cloud’ Prince) [PRO]

One of the best validations of the procurement technology sector is to see irrational exuberance from those who know comparatively little about it as they begin to speculate more aggressively on who is going to win in the market. Hearing Cramer call Coupa the “Cloud Prince” was but one example of the dozens I’ve heard both publicly and in one-on-one conversations in recent weeks from those outside the procurement solutions world.

These days, it seems everyone has an opinion on Coupa. Sometimes this speculation and soap-boxing grates on me because, in theory, it could mislead those within procurement and finance from making the best decisions if they get wrapped up in the noise. But it’s a price worth paying. Every insider — including everyone on the front lines of procurement, every tech vendor, every consultant, every analyst — should welcome every minute of attention Coupa gets. Why? Because it means there is going to be plenty of cash to fund the next generation of innovation for the sector.

Procurement is red hot right now, and honestly, shouldn’t saving money always be hot? But just how hot is Coupa? While I have real work to do providing a final set of eyes on some 250+ pages of draft copy for the Q2 SolutionMap Insider publications this week, I thought I’d procrastinate and share my own prognostications on Coupa and the arguments I’d make on betting both “for” and “against” the new crown prince — and also offer some fantasy sports commentary on just whom I’d combine Coupa with from the comfort of my lazyboy to conclude things (and luckily our SolutionMap framework lets us mix and match providers in different combinations — something that some of our early adopter practitioner clients are starting to explore in their evaluations).

Today I’ll start with five reasons I’m bullish on Coupa for procurement organizations — the company, not the stock, which is an important distinction as I have no opinion on share prices — by sticking with Cramer’s “prince” analogy. Of course I can’t help but think back to a philosophy class in 11th grade with Dr. Morinelli where we learned and debated Machiavelli's “The Prince.”

Virtuous princes, as Wikipedia translates and paraphrases Machiavelli, “rise to power through their own skill and resources (their ‘virtue’) rather than luck … [even though comparatively they] tend to have a hard time rising to the top, once they reach the top they are very secure in their position. This is because they effectively crush their opponents and earn great respect from everyone else. Because they are strong and more self-sufficient, they have to make fewer compromises with their allies.”

How is Coupa the virtuous [resourceful] prince for procurement? Read on as we explore the five reasons I’d bet on Coupa’s continued success at the same levels of the past.

Spend Management Versus E-Procurement: Is There a Philosophical Difference?

Editor’s note: This is part of the Ask Spend Matters series, where readers send in their burning questions about procurement and supply chain.

What is the difference — philosophically — between spend management software and e-procurement software? One of our readers recently posed the above question, noting the amount of noise out there over spend management and the general sense of confusion as to what constitutes spend management and what constitutes e-procurement. We’re always fond of these fun philosophical questions, so we asked our own Spend Matters analysts and editors for their opinions on this one.

Bringing Procurement Rigor to Merger Integration

Spend Matters welcomes this guest post from Bernard Gunther, co-founder of Spendata.

Mergers are rationalized by the expectation of post-merger synergies, a major one being cost reduction. However, cost savings opportunities that are routinely exploited by procurement are rarely a focal point for “clean teams” in pre-merger scenarios, or by the merged organization in the key 100 days of post-merger integration (PMI). In fact, the majority of mergers rarely deliver all of the expected cost savings.[2] In contrast, procurement can play a crucial role in planning for and delivering cost savings typically overlooked during the pre-merger analysis.

For Small and Midsize Businesses: Time to Talk About SpendBoss

SpendBoss was founded by Scott Schneider. His objective was simple: Develop extraordinarily easy-to-use spend management software that integrates well with the other technologies typical of the small to midsize ecosystems. This required making the software easily accessible as a service and, obviously, choosing a subscription price that would be a no-brainer. And SpendBoss has done just that.