Sourcing in Latin America (with Mexico Focus): A Primer for U.S. and Canada Procurement Organizations
Earlier today, Jason Busch, Spend Matters’ founder and managing director, and Xavier Olivera, director of Spend Matters Mexico and Latin America, conducted an “Ask the Expert” webinar titled Spend Matters en Español: The State of Procurement in Mexico and Latin America. Given the interest among both practitioners and providers in the U.S. in understanding priorities and how to do business in Mexico and neighboring countries most effectively, we decided to write a quick primer to showcase those items that companies should be considering as they develop their efforts in the region. For U.S. and Canadian organizations, the total cost equation is increasingly adding up for Mexico sourcing – and the ease of doing business is rising as well (aside from new regulations and compliance requirements for e-invoicing, which we will be exploring in more detail in a separate analysis).
Considering rising U.S. interest in nearshore sourcing, the timing could not be more perfect to launch a new site focusing on Latin America procurement and supply chain (Spend Matters will be launching this site in conjunction with Xavier in Sept/Oct 2014). Awareness and interest is at an all-time high among Latin American companies. Mexican organizations, in particular, are prioritizing efforts to get smart on tech solutions including analytics, P2P, and sourcing. This Spend Matters PRO research brief begins to explore top procurement priorities in the region and the state of solution adoption – as well as how to do business effectively with local suppliers and procurement organizations.more ▸
Pen and paper may as well have become the chisel and stone slab in today’s technologically-advanced society. Then again, even stationary desktop computers often present us with more of a hassle than they’re worth when we’re constantly working outside of our home or office. When procuring items on the run, all you really need is your tablet or smartphone. When we last looked in on Vivian, the everywhere event planner, she was thousands of miles away from home at the Marriott in downtown Chicago. Vivian’s company was just inside of two months away from hosting its annual user conference, a two-day event that 120 guests were expected to attend.more ▸
So far in this series, I have written about both the strengths and some of the limitations of basic sourcing tools – and when organizations should consider using them as opposed working with those that really do specialize in supporting more advanced sourcing organizations and sourcing requirements. Another key area that I’ve observed again and again in my research (including both public and private sector) in the case of more advanced tools is when organizations must have sourcing applications reflect heavy levels of governance and process based on regulatory or other requirements.more ▸
Did you miss last week’s webinar, “Signing the Dotted Line: Digital Signatures ARE that Important”? Fear not because the replay is here! Join Jason Busch (founder and managing director, Spend Matters) as he reinforces the importance of maintaining a 100% digital transaction, even when it comes to something as long-standing and traditional as the signature.more ▸
In Spend Matters’ view, Ariba has amassed what appears to be the largest IP portfolio in the procurement technology sector. It is important for competitors and customers to fully understand the diversity and depth of all the process and related patents that Ariba has filed and been granted. In previous installments of this series, we considered a range of patents (see Part 1 and Part 2) that Ariba has also been granted. Today’s Spend Matters Plus research brief by Thomas Kase, VP of research, explores the following Ariba patents: system and method for creating a spot market (spot market procurement – aka tactical sourcing – automated bids and awards); and importable templates (Excel and XML land grab).more ▸
Are companies in Mexico ready to adopt the solutions that the market is offering, or is the market ready to offer solutions that companies need? Lately I have had several conversations with some services providers’ executives, and all of them have asked me the same questions: How do you see the Mexican market for procurement and supply chain solutions? And do you think México is ready to adopt them? My first thought was always yes, of course, Mexico is already adopting them. But then I would start thinking about what the service providers had offered in the last 15 years and how hard it was to position them in Mexican companies.more ▸
Organizations need to realize a simple truth. Today, there is simply no distinction between an organization’s IT strategy and its overall strategy. And as we have seen, when an organization experiences a major IT embarrassment, there are larger, strategic ramifications that must be dealt with, often with very expensive and long-lasting consequences. Protecting customer data is a requisite for retaining the trust and loyalty of customers. And as the Target case has proven in recent traffic numbers for the retail giant, shoppers will be slow to come back to spend both on your website and in your stores after a major data breach.more ▸
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.more ▸
This is the second in a multi-part series on Spend Matters Plus. Read Part 1 here.
As our exploration of Ariba’s extensive and deep patents continues, we turn our attention to three specific patents tied to sourcing and eProcurement. Ariba’s stash covers a broad range – and a good deal of provider companies in the market can't avoid being in violation. That said, to us, many patents appear to cover either features used prior to the filing date – prior art, as the legal term goes – or be overly broad or otherwise fairly trivial. However, if and when Ariba decides to release their legal hounds, a good number of companies will likely be dragged in. Some providers might have struck licensing deals, and for those with IP portfolios of their own there is always a mutual cross-licensing arrangement to be made. In this Spend Matters Plus research brief, Thomas Kase, VP of research, discusses the following Ariba patents: auction bid and visibility restrictions; eProcurement (“figuring out if your supplier is on the Internet”); and supplier connectivity.more ▸
Transparency has always been an issue in IT sourcing. Not only is there no “Kelley Blue Book” for pricing, the degree of detail provided in one customer’s agreement terms compared to the next (even with the same vendor) is often inconsistent. Let’s take VMware for example. Many IT buyers don’t take into account the extent of detail that VMware or its resellers can or will furnish in quotes and contracts. Some wonder if they’re getting enough detail but have little understanding of what a healthy amount of detail looks like. Lately, we’ve seen several common “transparency pitfalls” in enterprise VMware purchases. Here are a few ideas to guide you through your next VMware transaction.more ▸
Intellectual property rights and patents are big business. And they are, of course, also competitive tools for companies. Witness how many years ago Ariba derailed Emptoris – now part of IBM – as a competitor for a number of quarters and forced a sale of the company based on a patent dispute. But the patent is more than just a tool for vendors to bash competing vendors. They are sometimes open to legal disputes. To the average consumer, the recent Apple vs. Samsung lawsuit over cell phone design and operating system features is probably the most widely recognized legal mess. In May, an Oracle vs. Google dispute concluded with a win for Oracle, with award amounts unspecified (Oracle originally wanted $6 billion).
Patents are powerful tools in the procurement solution software market as well, not just for warding off competitors, but even for generating considerable “income” for the successful parties when push comes to shove. Within the procurement sector, Ariba has amassed an incredibly impressive array of patents (if measured by the yardstick, at least), covering what some might construe as many of the basic elements of the source-to-pay process, including supplier connectivity and collaboration. In Part 1 of this Spend Matters Plus research series, Thomas Kase (VP of Research) provides context for past patent litigation in the sector and begins to cover a number of Ariba’s patents that could affect competitors and customers of competitors down the line. This analysis will attempt to get beyond the legalese with layman’s interpretations of each patent.
Today’s research brief looks at the following three Ariba patents: “supplier/buyer network that provides catalog updates,” “system and method for conducting electronic auctions with multi-parameter optimal bidding,” and “maintenance of a company profile of a company associated with a supplier/buyer commerce network.” If this is a topic of interest to you and you're not a Spend Matters Plus subscriber, contact us to inquire about a free trial.more ▸
Earlier today, GTCR and Opus Global Holdings collectively announced they had acquired Hiperos, the supplier (and other third-party) management vendor. Hiperos is originally a supplier performance management (SPM) focused provider from Southborough, Mass. It has since expanded to deliver a broad range of third-party data collection and supplier lifecycle management solutions – and will now operate as a business unit under Opus Global. Opus Global in turn is a JV between GTCR (a private equity firm from Chicago) and Doug Bergeron. Bergeron was until 2013 the CEO of VeriFone and is now the CEO of Opus Global. GTCR and Bergeron go back to VeriFone – which Bergeron (together with another investor) had bought from HP for pennies on the dollar ($50 million for an asset which HP has paid $1.3 billion). When Bergeron resigned after 12 years as CEO, the company had a market valuation of $3.5 billion. (We thought Bergeron’s long-term ownership and patient growth focus background is important to note.) Note also that Bergeron’s background is from the financial services industry – where Hiperos has a strong presence. In this Spend Matters PRO analysis, VP of Research Thomas Kase and Managing Director Jason Busch take a closer look at Hiperos (including a detailed SWOT analysis), private equity/buyout implications, the prospects for the supplier and third-party management market, and what the acquisition means for customers, prospects, and competitors.more ▸