Category Archives: Spend Management

Accenture Spend Trends Report: Logistics Market Intelligence – “Get Local” and More

Accenture's Spend Trends Report from Q2 (published in October) covers a number of macroeconomic areas impacting procurement and supply chain costs while also diving into a number of category-specific trends. One area the research brief explores is the logistics market, offering a global perspective on it and opportunities for savings and procurement improvement.

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Accenture Spend Trends Report: Energy Prices and Upward Cost Pressure

- August 25, 2014 6:23 AM | Categories: Category Management, Spend Management

As we continue our coverage of Accenture's Spend Trends Report, we turn our attention to the topic of energy prices and cost pressure. A number of Accenture’s findings are actually quite similar to a longer-term perspective we presented in a recent Spend Matters PRO research brief titled "Will the Cost of Energy Increase? On Statistics from the US Energy Information Administration." As Accenture notes in their analysis, energy prices are continuing on a long-term up-trend with short-term pullback and volatility along the way, albeit with a underlying long-term inflationary undertone.

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Attention Retailers – 13 Ways to Fund New IT Projects in 2015 (Part 3)

- August 13, 2014 2:56 PM | Categories: Guest Post, Spend Management

While the rest of us are wrapping up summer vacations, retail IT and sourcing executives are barreling towards the holiday retail season. As we’ve discussed before, few have time to get ahead of the IT and budget challenges that are waiting for them in Q1 2015, one of which is finding the money to pay for new IT projects. It’s a challenge for every industry, but especially for retail where IT innovation weighs heavily on margins and competitive differentiation. Here are the four final areas where IT overspending is occurring within most retail organizations. By taking a hard look at these areas, retail IT and sourcing professionals can turn overspending into funding – often millions of dollars that can be re-directed to IT innovation.

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Accenture Spend Trends Report: The Drivers of Category Trends Start with Economics

Who says that former sell-side analysts on Wall Street can’t do something better with their lives – like helping millions of procurement and supply chain managers make more informed decisions? My old friend and colleague Mark Hillman has shown there is hope for former financial minds that want to make a difference to industry. Mark recently joined Accenture after his former employer, Procurian, was acquired, and is leading up market intelligence efforts. One of this first public reports was released in early August. The Q2 edition of Accenture’s “Spend Trends” is a great piece of research that stands far above the type of analyses that knowledge process outsourcing (KPO) firms would charge clients a fee to deliver.

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Where Lower-End Sourcing Tools Strike Out Quickly (Part 2)

- August 13, 2014 6:21 AM | Categories: Category Management, Sourcing, Spend Management

Basic sourcing tools, especially those integrated with broader source-to-pay suites or the stand-alone capability of ERP providers (and those ERP providers have acquired), tend to come up short with specialist providers in a range of areas on a functional basis. But from a pragmatic perspective focused on business requirements, there are a number of areas where lower-end tools tend to strike out fairly quickly. These include the ability to support centralized procurement efforts – including those organizations with centers of excellence (CoEs) – along with decentralized execution mapped to centralized requirements and processes.

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New Paper Outlines Nuisance Spend, Tail Spend, and How to Address These Issues

- August 12, 2014 6:29 AM | Categories: Learning / Research, Spend Analysis, Spend Management

Tail spend, as it is narrowly defined, does not include the entire bulk of “nuisance” spend that many companies must endure. In a new research paper titled "Re-thinking and Re-claiming 'Tail Spend,'" Chief Research Officer Pierre Mitchell delves into the importance of process design, proper tools, and flexible resourcing models. As he writes, "the idea of ‘tail spend’ doesn’t seem very complicated at first. Run a pareto analysis on your spend categories and suppliers to make a cut off at, say, the 80 percent that represent only 20 percent of your spend. Your numbers will of course vary, but the idea is to find a way to better manage such ‘nuisance’ low-dollar spend that doesn’t detract from your efficiency, or worse yet, from spending time managing the truly strategic spend categories more deeply.”

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Attention Retailers: 13 Ways to Fund New IT Projects in 2015 (Part 2)

- August 6, 2014 2:32 PM | Categories: Guest Post, Spend Management

As I discussed last week, this time of year is a slippery slope for retail IT and sourcing professionals. They don’t have as much time as they’d like to get ahead of the IT and budget challenges that will greet them as soon as the holiday retail season is over. But rest assured – those challenges will be waiting for them in Q1 2015, including finding the funds for new IT projects that will increase margins and competitive differentiation. Here are four more areas where IT overspending is occurring within most retail organizations. By taking a hard look at these areas, retail IT and sourcing professionals can turn overspending into funding – often millions of dollars that can be repurposed for IT innovation.

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50 Shades of Pay: Level 1 – How to Wring Every Bit of Value Out of Spend Data

In this introductory analysis, we begin our exploration of how to wring every bit of value out of spend data. At every level or ‘shade’, we will describe the spend-related analysis (i.e., its scope and the approach used to attack it), the value of it, the challenges in doing it, and some methods to overcome those obstacles. In level 1, we'll start with basic Accounts Payable (A/P) spend analysis by supplier – the very basics (this is absolutely essential). Let’s jump in!

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Attention Retailers: 13 Ways to Fund New IT Projects in 2015 (Part 1)

- July 30, 2014 2:42 PM | Categories: Guest Post, Spend Management

This time of year is a slippery slope for retail IT and sourcing professionals. With much of their effort going to preparing for the holiday retail season, few have time to think about the IT and budget challenges that will be waiting for them in Q1 2015. So, what can retail IT and sourcing leaders do now to make sure they have the funding available to take on next year’s innovation challenges? One best practice is to formally identify – and eliminate – overspending, which frees up existing budget dollars to be re-purposed to unfunded projects. Here are the first four (of 13) specific places to look for overspending. A structured and focused approach to optimizing pricing, licensing, and business terms across your IT portfolio can free up millions of budget dollars.

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50 Shades of Pay: Spend Analysis’s Many Profitable Pleasures

50 Shades of Pay

You know spend analysis. So basic. So primal. Wham, bam, spend cube, thank you ma’am – you’re done, right?

Not so fast. Spend analysis is not a quickie event on your long-term procurement transformation. It is an evolving competency, one in which as you become more skilled with it, you can bring so many different forms of [business] satisfaction to many stakeholders. In fact, there are so many incremental levels of value that can be developed here that I challenged myself to write a 50-part series on what such a journey might entail. I will also be using a consistent graphical model to show different aspects of such increasingly detailed capabilities to help illustrate the techniques. It’s not the Kama Sutra or anything, but it will be helpful. But before I launch into the series, a bit of a preamble is first in order. Why is spend analysis such a deceptively alluring topic that I’ll be looking under the covers with you? There are many reasons.

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Information Spend Matters: Procurement Should Think Twice before Cutting Paid Subscriptions

- July 25, 2014 6:39 AM | Categories: Commentary, Friday Rant, Spend Management

physical newspapers While there are major strategic implications for media companies and society as we turn into a culture of “free” news and information, there is one group of people that still expects to pay for their information: business executives. As companies look to cut costs by shifting from paid subscriptions to free sources of similar news and information, it is likely that they will find stiff resistance from executives. While moving to free news sources might make short-term financial sense, a recent study has found that executives around the world use and trust paid media in a way that produces value for themselves and their companies.

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How to Cut Software Maintenance and Support Costs (and Fund IT Innovation)

- July 23, 2014 2:39 PM | Categories: Guest Post, Spend Management, Technology

The cost just to “keep the lights on” in IT has grown exponentially over the years. Recent studies show that an average of 72 percent of the enterprise IT budget goes to this area, leaving only 28 percent to fund new projects. A big chunk of the 72 percent goes to maintenance and support – and that reality isn’t expected to change anytime soon. Here are four of the best ways to cut maintenance and support costs.

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