Spend Matters Premium Content:
Procurement Strategy

In Defense of the Signed Document [PRO]

- July 24, 2014 3:22 PM

Many people refer to ERP systems (notably master data stored in them) as the “system of record," which is interesting terminology. Think about supplier master data entered in the buyer’s ERP system that immediately can become “stale” the moment it’s entered. Let’s even take a better example of the penultimate document of record between the trading parties: the contract. A buying organization can use a contract lifecycle management solution that is fully integrated with an e-sourcing solution and even Microsoft Word documents that can be used as the user interface of sorts in contract authoring. Data is tracked at a detailed data element level and built up from low-level clause libraries. Yet when it comes time to seal the deal, the buyer and supplier print the contract and then start scurrying around for the final signatures, usually hand-written and faxed, only to then be stored and scanned so that the document image can be attached back to the CLM/ERP system. In today's Spend Matters PRO research brief, Pierre Mitchell makes an argument for the need of systems to accommodate the data types and user types across the source-to-pay continuum.

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What Makes Public Sector Spend Analysis Different: Motivations and Process Requirements (Part 2) [PRO]

- July 23, 2014 11:21 AM

Building a successful public sector spend capability requires similar core capabilities as found in those sold to the private sector, as well as additional ones. But more so than simply checking the feature/function box as a vendor – or in software/solution selection processes as a user – implementing the right public sector spend analysis approach requires taking a slightly but critically different mindset compared to what is tried and true in the private sector. In Part 2 of this Spend Matters research series (see the first installment here), Jason Busch, founder and managing director, continues to explore what these unique motivations, requirements, and approaches are.

The final installment of the series (Part 3 – forthcoming) will continue to profile one of the specialist vendors in the sector, Spikes Cavell, which appears to have cracked the code on what federal, state, and local organizations most value in understanding their expenditures, reporting on activities, and tying data to actual programs to drive better constituent outcomes. There are clearly lessons in this regard for public sector procurement organizations and overall leadership (employees and elected officials), other technology and solution providers expanding their public sector presence, and, surprisingly perhaps, the private sector as well.

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Provider Strategies in Asia: Country-Specific Trends and Considerations (Part 2) [Plus +]

- July 22, 2014 11:35 AM

This is the second in a two-part Spend Matters Plus series from Thomas Kase, VP of research, on strategies for providers to deliver procurement solutions and services in Asia. This second installment covers specific trends and recommendations for Singapore, Japan, Korea, China, Thailand, Vietnam, the Philippines, and Malaysia. So what should a company looking at an Asian expansion do? If this is a topic that interests you and you're not a Spend Matters Plus subscriber, contact us to inquire about a free trial.

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Provider Strategies: Delivering Procurement Solutions and Services in Asia (Part 1) [Plus +]

- July 21, 2014 10:56 AM

“Asia” is obviously an impossibly broad label, covering so many countries, with such a range of cultures, languages, and political, ethnic, and demographical issues that we have to paint with broad, sweeping strokes. That said, there are definitely procurement culture traits worth pointing out. Depending on a solution provider’s strengths and capabilities, we think the region is ready for a more serious look – consider it hedging your bets, since everybody is already slugging it out in the U.S. and Europe. So the question is, what are you doing in Asia, the region that outgrows Europe and the US at a rapid clip? In this first of a two-part series on Spend Matters Plus, VP of Research Thomas Kase gives a backdrop on regional issues to know.

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Trojan Rabbits and Project Portfolios: Procurement Market’s Freemium Applications and Services (Part 1) [Plus +]

- July 18, 2014 2:05 PM

The old Trojan horse trick has its place in the procurement market. This Spend Matters Plus research brief, by Chief Research Officer Pierre Mitchell, covers the good, bad, and ugly of “freemium” technology for different types of procurement solution providers across the solution spectrum, from technology providers to membership-based advisory firms. Pierre then makes some recommendations for not just solutions providers, but also practitioners who themselves are providers in their own right. If you are not yet a Plus subscriber and are interested in this topic, contact us to inquire about a free trial.

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Designing a Spend Category Taxonomy Properly is Harder Than You Think (Part 2: Go Deep) [PRO]

- July 15, 2014 2:30 AM

Earlier in the month, we had a client ask us if we could offer specific guidelines or methodologies for creating a spend category taxonomy within the automotive and industrial markets. The question resulted in a discussion among a number of us with industry experience. And since we didn’t have any research already published on the topic, we thought we’d invest the time to document our findings. In this second installment of a two-part Spend Matters PRO research series, Chief Research Officer Pierre Mitchell explores how granular procurement should go in creating a spend taxonomy and concludes with practical tips for implementing a program.

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Designing a Spend Category Taxonomy Properly is Harder Than You Think (Part 1: Do This, Not That) [PRO]

- July 11, 2014 6:34 AM

We had a question from a client of ours about whether there were any guidelines or an overall methodology to coming up with a spend category taxonomy. It’s a simple question, but there isn’t a simple answer. So, we thought we’d offer some insights to help guide your efforts. But before we say what to do, there’s a quick recommendation on what not to do. In this first of a two-part Spend Matters PRO research series, Chief Research Officer Pierre Mitchell explores how to think about creating a spend category taxonomy, pitfalls of incorrect approaches, and how to embrace an approach that cuts across categories and spend types.

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Why Purchase Price Variance (PPV) Should Be Banished From Procurement Measurements and KPIs [PRO]

- July 3, 2014 2:26 AM

One of the biggest challenges to overall program impact and improvement in all but the most advanced procurement organizations are the raw elements that many procurement organizations measure themselves against: key performance indicators or KPIs. One of these, purchase price variance or PPV as it is often known, is particularly obnoxious in all but certain cases. PPV measures the difference in price paid for across a range of purchases for a similar SKU, part, or service.

There are many reasons why PPV can be such a misleading figure.

In this first of a two-part Spend Matters PRO research series, Managing Director Jason Busch and Chief Research Officer Pierre Mitchell explain why precisely PPV is a KPI that procurement organizations should stop measuring internal and individual performance against. Part 2 will present the one case in which it might be helpful to police suppliers more accurately (courtesy of a new, real-time network approach to gathering spending data from Tungsten based on actual line-level invoice information that we believe will eventually become standard across many supplier networks).

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Gamification in Procurement – Looking Beyond the Technology [Plus +]

- July 2, 2014 2:33 AM

Gamification is a topic that has garnered some interest over the last few years, and I thought it would be a good topic to explore a little more deeply in terms of its application to enterprise procurement and supply chain. This is an interesting technology area that a few enterprises have sought to transplant from the mobile B2C world over to enterprise processes to help improve relationships with customers and with internal employees. For example, some progressive HR organizations are setting up wellness programs that reward employees to exercise and use mobile game apps to help motivate them. Similarly, some sales organizations have used it to create contests that let sales reps compete with each other for additional bonuses and recognition. In this Spend Matters Plus research brief, Chief Research Officer Pierre Mitchell looks at how gamification can be used in procurement, as well as where the benefits stop.

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Business Process Management (BPM) for Procurement: A Spectrum of Choices [PRO]

- July 1, 2014 3:04 PM

BPM stands for Business Process Management. If the business process is procurement (i.e., a collection of processes), then the concept is about managing procurement processes – including process design/definition, performance management (e.g., process outputs/KPIs, monitoring), and resource management. Of course, in the IT world, BPM has its own body of knowledge regarding the topic, focused mostly on “process workflow/integration on steroids.” This is the “system of process/interaction/engagement” that may sit on top of multiple systems of record (e.g., ERP, source-to-pay suites). But how can you approach this topic without your eyes glazing over? In this Spend Matters PRO research brief, Chief Research Officer Pierre Mitchell and Managing Director Jason Busch define BPM components and offer up practical ways to apply BPM to procurement, keeping the topic on a business level and issuing both warnings and best practice tips for companies deploying or considering BPM technology adoption within the function.

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SAP, Fieldglass, and the Future of the VMS: Why MSPs and Staffing Firms Should Wake Up to a New Threat [PRO]

- June 26, 2014 2:27 AM

It’s business at usual at Fieldglass. With their customer event this month and, as far as we’re aware, no big decisions having been made regarding combined product rationalization and roadmaps with SAP and Ariba, it’s clearly a post-merger honeymoon period. And they deserve it – Fieldglass has done a commendable job working and building trust with both customers and the incumbent managed services provider (MSP) ecosystem (Tapfin, Allegis, KellyOCG, Agile-1, Randstad, Bartech et al) over the years while also driving more competitive pricing in the contingent workforce marketplace. But at some point, change will come as SAP evaluates such areas as product integration, sales structure, partnerships/business development, marketing, pricing and the like.

All of this is to be expected. But those in for the biggest shock likely won’t be competitors (we think the acquisition will raise the profile of the humble VMS and services procurement generally – which is a good thing). No, those in for a shock will be staffing firms and their MSP arms as well as independent MSPs – which potentially have far more to lose than gain as technology automation and integration with broader procurement accelerates. In this Spend Matters PRO research brief, Managing Director Jason Busch takes a look at how and why the SAP acquisition of Fieldglass will eventually shake the services procurement and staffing ecosystem to the core – and the winners and losers likely to emerge.

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ProcureCon and Marketing Services Procurement: What We Agree On, What We Don’t [Plus +]

- June 24, 2014 3:21 PM

Peter Smith of Spend Matters UK/Europe attended the recent ProcureCon marketing event in London and found it to be a success in terms of number of delegates, sponsors, and quality of the sessions and subsequent debates. In this article for Spend Matters Plus, Peter discusses the state of marketing services procurement and breaks down the areas where speakers were in agreement and the less clear-cut issues. Not a Plus subscriber yet? Contact us to inquire about a free 30-day trial.

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