Category Archives: Spend Management

Model and Manage Total Costs – 10 Services Procurement Secrets (No. 3)

dollar wallpaper Modeling and managing total cost is an important best practice for procurement organizations expanding their services procurement efforts. In the direct supply chain, cost management is religion. From modeling the total cost of individual parts or components – including raw materials, labor, value-added elements, etc. – to factoring in inventory carrying costs and general working capital, total cost is the direct procurement king. But in services procurement, we typically only build limited visibility into total cost both from the buyer and the provider (cost breakdown) perspective.

more ▸
 

How to Sell MRO Spend to Your Organization

1129141-2590-D31A-40A871BEE07DC548 Earlier today on Spend Matters PRO, we published Part 2 of a series focused on MRO spend. Authored by Jason Busch, founder and managing director, and Pierre Mitchell, chief research officer, the series explored MRO-specific procurement. Today's article, Building a Business Case for Addressing Complex MRO Spend in Asset-Intensive Industries, looked at how to create a case for investing in MRO items, and Jason and Pierre also offered their recommendations for procurement organizations to begin their MRO initiatives.

more ▸
 

Building a Business Case for Addressing Complex MRO Spend in Asset-Intensive Industries

Brick-Wall-10211351BDAC83D7 Asset-intensive industries such as mining, energy (including oil & gas), utilities, chemicals, heavy equipment, construction and related sectors can meet, exceed or miss earnings expectations based on the availability of key assets and facilities in their portfolio, from plants to rigs. To maximize up-time and availability and to minimize the time to overhaul specific assets, many have invested in specialized solutions to manage plants and other facilities. Yet in the vast majority of cases, organizations have not prioritized specialized procurement solutions that could drive substantial savings, risk reduction and other benefits, sitting alongside asset and facility solutions including Maximo/IBM, SAP PM/MM, IFS, Ventyx, ABB, Oracle Asset Management, Intentia, Infor EAM and others. This Spend Matters PRO brief, the second in a series, explores MRO-specific e-procurement use cases for specialized investment in this area. Today’s analysis centers on building the business case for specialized investment in this area and provides recommendations to organizations on how to get started.

more ▸
 

For Your Pleasure: 50 Shades of Pay is Back!

- March 20, 2015 10:49 AM | Categories: Learning / Research, Spend Analysis, Spend Management

42EEF15DFA Pierre Mitchell, chief research officer at Spend Matters, returns with his 50 Shades of Pay series. For “Shade 10,” Pierre hands the reins over to GEP for Giving the Car Keys to Those Who Own the Cars. This analytics-based report lets business users assess their own spending, and the results, as always, will surprise you. Get your free copy today!

more ▸
 

Push for Open Architectures and Networks in Indirect Spend

tumblr_nbrszqSNYw1qfirfao1_1280 Finally, we come to our last recommendation in this series of how to make indirect spend more effective: providing an open architecture that will allow procurement and business users to access multiple communities and networks including supplier-led models, GPOs, BPOs, MSPs and related intermediaries. When pushing for open architectures and networks, we must keep in mind the following guiding principals...

more ▸
 

Exploring SciQuest Release 15.1: NextLevel Conference Dispatch

IMG_2229 (1) Eric Zoetmulder, vice president of product management, took the stage at SciQuest’s NextLevel conference this morning and shared a number of product themes around where SciQuest is placing emphasis on investing in its suite and individual modules. While we will be covering some of the specific product-level enhancements in detail in the coming days on Spend Matters PRO, we talk about some of the general themes he shared during his presentation.

more ▸
 

Exploring SciQuest Release 15.1: NextLevel Conference Dispatch

Eric Zoetmulder, vice president of product management, took the stage at SciQuest’s NextLevel conference this morning and shared a number of product themes around where SciQuest is placing emphasis on investing in its suite and individual modules. While we will be covering some of the specific product-level enhancements in detail in the coming days on Spend Matters PRO, we talk about some of the general themes he shared during his presentation.

more ▸
 

Empty Apps Are Out – How To Target Indirect Spend More Effectively

- March 13, 2015 6:25 AM | Categories: P2P, Services and Indirect Spend, Spend Management

app-store-device-macbook-air-1171-825x550 Empty apps are so 2012. When it comes to enabling indirect spend today, if you plan to leverage empty-apps without pre-populating additional content and even third-party contracts in certain cases, you might as well outsource indirect spend entirely without even doing a cost/benefit analysis. What we term “pre”-enablement is key to get away from the empty-app mindset.

more ▸
 

Applying Contextualized Concepts to Indirect Spend

- March 12, 2015 6:20 AM | Categories: Analysis, Spend Management

public-domain-images-free-stock-photos-high-quality-resolution-downloads-nashville-tennessee-5-1000x666 copy We must build greater empathy into the indirect procurement solutions that we deploy to frontline users. Part of this effort requires thinking of guided buying as a key enabler. This includes the concepts of “multi-channel,” contextualized and intuitive shopping and buying models. If we get contextual approaches right, we can steer users to the right decisions. But we must think like creative merchants and distributors, not like procurement (i.e., how do we guide users in a seamless manner to the optimal outcome for us).

more ▸
 

A New Way to Procure Services – Make them Products

- March 11, 2015 2:03 PM | Categories: Guest Post, Spend Management

Spend Matters welcomes this guest post by Marc Osofsky, general manager at Lionbridge. Why is it so hard to increase services spend under management? Procurement departments have been struggling to attack services spend for at least a decade. As we know, services spend categories are highly attractive to procurement given their generally high supplier margins and large overall purchase volume. Most procurement organizations have been attacking numerous services spend categories through traditional methods, but making little progress in terms of increasing spend under management.

more ▸
 

Adapting Supply Chain and Direct Procurement Lessons to Services Procurement

2F5409A5EA Spend Matters research suggests that the opportunity for Global 2000 companies to translate and adapt processes, lessons learned, skills and expertise from the direct and indirect materials supply chain into services is highly material. The data and observations should also serve as a wake-up call to the services procurement provider ecosystem (managed services providers, vendor management system technologies, industry analysts and consultants) that an immense opportunity remains to drive even basic efficiencies, control and continuous improvement within services supply chains.

more ▸
 

The Fundamental Problem With Contingent Workforce Management Today

Business Budget Spreadsheet In today’s global economy, firms like Amazon, Apple, GE, P&G and Walmart all compete on how well they manage their extended supply chains and associated spending on critical goods and materials. But, in an increasingly services-based economy where nearly everything is becoming a "service" (including all the non-production elements associated with creating a product), applying the same rigor in managing external services spending should also be important. Yet, Spend Matters has found that relevant best practices and principals in managing materials spending are not well applied to services spending – particularly in the area of contingent labor.

more ▸