The Strategic Sourcing Category

SAP Ariba Launches A New Sourcing Front — Decision Optimization (Part 1: Solution Components) [PRO]

SAP Ariba has opened a new front on the strategic sourcing optimization software battlefield. We recently received a detailed product demonstration of the next evolution of SAP Ariba’s decision optimization capability, as well as a glimpse of what’s on the roadmap. Our take is positive. SAP Ariba’s foundation and future plans represent a solid start in this area. And while other established providers of sourcing optimization tools have a decade-long head start, we expect SAP Ariba to progress faster in its optimization journey than many of its peers.

In this two-part Spend Matters PRO analysis, we begin with an introduction to the required solution components of sourcing decision optimization and an explanation of the benefits they can bring to procurement organizations. In Part 2, we offer an overview of SAP Ariba’s new decision optimization capability, exploring its strengths and weaknesses. 

So You Want to Buy Strategic Sourcing? Key Differentiators to Consider [PRO]

In our previous installments of this series, we focused on some of the key differentiating aspects of contract management and spend analytics solutions. As you may recall, rather than focusing on the features and functions that most providers deliver, this series is focused on highlighting areas that pop up as differentiators in the eyes of the more progressive practitioner organizations that we speak with. The idea is to help separate the wheat from the chaff even though we don’t know what exact flavor of bread that you’re baking.

Within the sourcing area, we will also take some additional liberties by highlighting some key functionality that might perhaps better fall into an “extended sourcing” category that transcends just traditional sourcing strategy and execution. For example, project portfolio management, savings management, performance management, stakeholder management, and other processes clearly transcend just sourcing, but from a pragmatic “on the ground” standpoint, these are often prioritized by sourcing and category management teams. They are trying to drive short-term value while trying to scale their efforts with a form of knowledge management that will support their longer-term transformation outside of episodic sourcing events and into a more end-to-end lifecycle view of progressive category management.

There are also some provider-level differentiators that transcend software feature-function nuances, and we’ll highlight these as well. OK, let’s dive in.

From Watch to Know in 2018: How Scout RFP Helps Procurement Put the ‘Strategic’ Back in Sourcing

Each year, some companies on the Spend Matters 50 Providers to Know and 50 Providers to Watch lists push themselves beyond simply a standout performance. They earn the recognition that they are not only bringing innovation into procurement organizations but also leading the charge to change the way we do business for the better. These are the providers who shifted from Watch to Know in 2018.

To learn more about these providers, we reached out to the four such cases in our 2018 50/50 lists, asking how they’ve changed over the years and what differentiates them from the competition. Today’s Q&A features Sean Michael, senior manager of content and communications at Scout RFP, a provider of sourcing solutions.

I’m Afraid I Can’t Source That, Dave: Artificial Intelligence in Strategic Sourcing

Last week marked the 50th anniversary of Stanley Kubrik’s “2001: A Space Odyssey.” One of the great scenes in this landmark movie is when astronauts Dave Bowman and Frank Poole chat “in private” about shutting down HAL 9000, the omnipresent, artificial intelligence-based control system. Unfortunately, HAL’s vision system is able to read Dave’s lips through a small window and learns the crew’s intentions. To protect itself and thereby its mission directive, HAL sets out to kill the astronauts. Although the complex automated reasoning that HAL uses in its attempt to snuff out Bowman and Poole is a bit beyond current AI implementations, the procurement process-specific applications of machine learning are becoming quite real.

Applying Strategic Sourcing to Talent Management: What You Need to Know

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By 2020, more than half of the U.S. workforce will be involved in contingent work. Companies are rethinking their talent management strategies accordingly, and those that are familiar with strategic sourcing may already be a couple steps ahead. How strategic sourcing can be applied to talent management was the topic of a webinar that Spend Matters analysts Jason Busch and Andrew Karpie presented last month with NextSource’s chief executive, Catherine Candland, and senior program director, Jim Gallagher. NextSource has been in the contingent workforce business for the past two decades.

Beyond Logistics: 6 Non-Traditional Categories Where Companies Should Apply Sourcing Optimization

What exactly is sourcing optimization, and where can it be applied, besides the obvious areas? Earlier this month, Spend Matters analysts Michael Lamoureux and Tom Finn teamed up with Garry Mansell, sourcing optimization general manager at Coupa, on a webinar on this very topic, “Sourcing Optimization in New Categories: A ‘How-To’ Guide.” As the webinar title suggests, this isn’t about logistics or MRO, but rather some more non-traditional categories — six to be exact — where sourcing optimization can bring significant savings.

LUPR: Vendor Snapshot (Part 3) — Summary and Competitive Analysis [PRO]

The market for supplier management technology is complex. Not a single provider that Spend Matters has reviewed as part of our PRO and SolutionMap analyses comes with out-of-the-box capabilities to competitively and fully support the myriad of solution components in this area, spanning supplier discovery, supplier on-boarding, supplier information management (SIM), supplier master data management (MDM), supplier performance management (SPM), supplier risk management, supplier diversity enablement and supplier quality management. Granted, some technology providers come close. But most opt to specialize in one or a handful of supplier management disciplines.

LUPR is one such provider, specializing in strategic supplier management (primarily supplier quality and supplier performance) in support of manufacturers and direct materials procurement initiatives. This final installment of our multipart Spend Matters PRO Vendor Snapshot series covering LUPR offers a SWOT analysis, a competitive assessment and comparisons with other providers in the supplier management market. It also includes a user selection guide and summary evaluation and selection considerations. Part 1 and Part 2 of this PRO research series provide a company and deep-dive solution overview, product strengths and weaknesses and a recommended fit analysis for what types of organizations should consider LUPR for supplier management initiatives.

Is Strategic Sourcing the Best Route to Smarter Bunker Procurement?

Spend Matters welcomes this guest post from Gaurav Singh, consultant at GEP.

Since the internet became commercially popular in the early 2000s, companies have made attempts to change the way the market trades bunkers. We’ve come a long way since 2000. Now we’re used to conducting transactions online in our everyday lives and have seen the rise of the “digital ship.” But although shipping was expected to be among the first industries to embrace technology, it has ended up as the last one to adopt new ways of doing business.

What is Your Strategic Procurement Technology (Suite) Persona? Understand Your Requirements to Find the Best Technology Provider [PRO]

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No two procurement or supply chain organizations are alike. Each has its own persona that reflects not only its own unique requirements but also the stakeholders it serves when providing timely and accurate spend, procurement, supply and broader analytics.

The same principle holds true when analyzing strategic procurement technology suites. Each provider has a persona — or set of personas — that reflects its value proposition, solution strategy and targeted customer segments. Therefore, procurement organizations should seek providers whose personas best align to theirs. In other words, there is no “magic” solution provider, and finding the right fit is essential, because supplier management applications are critical for not only identifying savings opportunities but also the effective management of the procurement function.  

SolutionMap depicts vendor rankings based on specific buyer personas to reflect the unique value proposition, solution strategy and customer segments served by a vendor. Participating vendors are scored both on their Solution capability as well as on Customer Value, based on in-depth tech reviews (including live demos) by the Spend Matters analyst team and aggregated direct customer input from surveys. Each SolutionMap is updated quarterly rather than in 12-month (or longer) cycles, to accurately reflect the pace of market developments.

As part of our Spend Matters SolutionMap vendor comparison ranking for strategic procurement technology suites, the Spend Matters analyst team has dedicated considerable time to developing the unique organizational personas that we’ve most often seen in our decades of experience working with procurement organizations.

We have used these personas to weight the requirements used in solution scoring, which includes customer satisfaction scoring by solution customers. Having collected feedback from hundreds of procurement organizations in recent months as part of our SolutionMap research, we see these personas as useful starting points for procurement organizations to classify themselves before looking at solution rankings of providers in the market.

This Spend Matters PRO analysis shares five of the most common customer personas for strategic procurement technology suites buying requirements. Aimed at practitioners as well as vendors and the consultants advising them, this research brief will be helpful to drive the type of mass customization of strategic procurement technology solutions needed to meet specific organizational needs.

Below, we present our five personas for strategic procurement technology suites. For each, we include full definitions, typical organizational priorities (based on each persona), modular component weightings (and links to other PRO reports for detailed Solution and Customer value weightings) and recommended selection processes.

What To Expect from Best-in-Class Sourcing Optimization Technology and User Design (Part 1) [PRO]

There’s a reason Coupa spent a healthy chunk of its IPO proceeds to purchase Trade Extensions: sourcing optimization technology is heady, complex and requires significant mathematical, technical and domain expertise to build. But more important than the barriers to entry in bringing it to market, the value sourcing optimization can bring to customers is materially greater than what standard e-sourcing and reverse auction technology can deliver. So if you’re pitching “savings” or “value” as a service for procurement, you’d be hard pressed to prioritize any other area over strategic sourcing optimization and related supply network design capabilities — even if it’s still somewhat a novelty in terms of adoption outside of logistics and transportation spend.

While we have explored and defined sourcing optimization technology in the past (including specifically what makes Trade Extensions great and why Coupa bought it from a customer perspective), we have not yet defined what the optimal (no pun intended) components and user design elements of a sourcing optimization solution look like more generically. This Spend Matters PRO series aims to do just this, breaking new ground in spelling out for procurement and supply chain professionals, consultants and technologists what they should look for (or strive to build) when considering sourcing optimization capability. It is meant as a companion to the other PRO articles in this series thus far covering what best-in-class technology and user design look like for e-sourcing (see: here and here) and reverse auction (see: here and here) technologies .

So what does best-in-class sourcing optimization look like and how does form follow function from a design perspective in supporting it? In this first installment in our series, we cover the concepts of powerful constraint support (and what’s required to support it), solid mathematical foundations and advanced cost modeling.