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Procurement Strategy

Procurement Organization and Structure – Why It Matters For CPOs [Plus +]

- February 24, 2015 2:42 AM

6F1FE6B0BE I spoke earlier this month at a half-day workshop event organized by Oracle and Enrich. The topic was “Future-Proof Procurement – what does the future-proof structure and strategy look like?” In particular, my session looked at the issues around how we structure the procurement function, particularly in large, complex organizations, and how that relates to strategy, culture and operating model. Why does the structure of procurement matter? And how do you design an appropriate structure that aligns with the wider organizational strategy, culture and goals? We answer these questions.

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The CPO’s Guide to Lean & Six Sigma – Part 3 (Applying Lean Six Sigma to Procurement) [Plus +]

- February 5, 2015 2:53 AM

hands holding jigsaw In our previous two segments of this series published on our Chief Procurement Officer website (see here and here), we discussed Lean and Six Sigma individually in terms of their history, their approaches and their relationship to each other. In this installment of this series, we drill down into how to begin to apply Lean Six Sigma to procurement. In this Plus post, we define the process of when the Lean is integrated with Six Sigma and applied to supply management.

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Services Procurement History: Staffing Firm Dominance Faces a Challenge [PRO]

- February 3, 2015 2:39 AM

climb In this Spend Matters PRO research brief, Jason Busch, founder and managing director, introduces the ideas behind why Spend Matters believes staffing firms will begin to increasingly share overall contingent market share with alternative models including the direct hire of freelancers/independent contractors, talent marketplaces, individual “out-tasking,” alumni and shared interest pools and related models. We also provide a readiness checklist for procurement organizations increasingly tasked with managing services spend that will offer a quick, honest assessment to show if they are ready (or not) for new models.

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Services Procurement History: The Rise of the Staffing Industry Model [PRO]

- February 2, 2015 2:33 AM

Business-People-Group-101613CBB33E740E By just about anyone’s numbers, the staffing industry still maintains dominant market share when it comes to placing temporary or contingent labor at companies (and often government agencies and departments). In this multi-part Spend Matters PRO analysis, Jason Busch, founder and managing director, takes a look at the growth of the temporary labor market and how staffing firms emerged as a dominant model – and the context with which they accelerated their growth in recent decades. Finally, he introduces the ideas behind why Spend Matters believes staffing firms will begin to increasingly share overall contingent market share with freelancer models, talent marketplaces, alumni and shared interest pools, independent contractors/consultants and related models in the coming decades and what this means for procurement organizations increasingly tasked with managing services spend.

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ERP and P2P Integration: Key Success Factors For Successful Implementations [PRO]

- December 10, 2014 2:48 AM

1350915816wrses In this Spend Matters PRO research brief, P2P Lead Analyst Xavier Olivera considers the many lessons learned in his work implementing and integrating e-procurement and P2P systems to core financials – as well as the results of our recent research in the area and why companies continually do not take enough time to consider ERP integration strategies. We also recommend steps to steer organizations through successful cloud P2P-to-ERP integrations. Last, we cover key success factors to consider during integration strategy development.

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50 Shades of Pay – Shade 10: Giving the Car Keys to Those Who Own the Cars [Plus +]

- December 4, 2014 2:27 AM

In this latest edition of our 50-part analytics series, we deal with the topic of letting business users analyze their own spending. This might seem obvious, but too often spend analysis tools are developed or purchased by procurement power users looking to do strategic sourcing rather than a broader set of business users, with many of them being casual users who actually own the spend. Certainly, business user should be brought in early as part of a spend analysis requirements definition and solution evaluation, but we have waited until the tenth part of our series because we do find that many procurement organizations do hold off until they have built out a reasonably solid-to-spend cube at the line-item level (by supplier, category and cost center) before they really start turning over the keys of the spend analysis tool to the end users for their own inquiries.

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Where Zycus Can Improve in the End-to-End Procurement Suite Big Leagues [PRO]

- November 14, 2014 2:31 AM

Earlier this week, we published the first in a two-part series offering perspective and recommendations on what Zycus, a procurement suite vendor, is doing right. But no provider is perfect. And Zycus, which has increasingly larger ambitions to become a leading source-to-pay (S2P) provider (versus “just” spend classification, analytics, sourcing, contract management, supplier management and related areas), has some significant work to do in the purchase-to-pay (P2P) arena if it is to go head-to-head against an increasingly busy, noisy and confusing field of incumbents and upstarts. In this Spend Matters PRO research brief, Managing Director Jason Busch and Chief Research Officer Pierre Mitchell provide a candid take on areas of improvement for Zycus. They will also offer their perspective, as an addendum to this series on Spend Matters Plus, on what types of customers are an ideal fit for Zycus today.

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50 Shades of Pay – Shade 9: The Magic Cube (Analyzing it) [Plus +]

- November 11, 2014 6:23 AM

In Part 1 of this Shade 9 Plus article, we discussed building your “spend cube.” Now that you have done that, the real fun begins: finding savings opportunities! Certainly, finding sourcing savings is where most start. The most popular analysis of course is evaluating spend fragmentation within a category across suppliers at the enterprise level, the regional level, the cost center level, the business unit level and so on. Since there is so much information out in the public domain (and from providers) on various spend reports that you can run off of this spend cube (e.g., including time as another dimension to support multi-period spend trending), we won’t re-invent the wheel, but do want to make a few points...

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50 Shades of Pay – Shade 9: The Magic Cube (Building it) [Plus +]

- November 10, 2014 6:39 AM

In this installment of our 50 Shades of Pay series, we finally dive into some of the gory critical details of building out the “magic cube” of spend visibility. Actually, it’s not that magical, and it can be more than 3 dimensions, but let’s keep it simple for now. The cube provides the data to answer the question, “How much did we spend on what with whom?” What we’re focusing on with this installment in the series is getting the data “on what” by classifying line-item level detail data into a spend category taxonomy.

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50 Shades of Pay: Shade 8 – Analyzing the “Bookends” of Purchases [Plus +]

- October 27, 2014 10:04 AM

In some of the previous installments of this series, we discussed why and how you might want to analyze the processes that generate spending so you can spend better by buying and paying better (we’ll get to sourcing in our next installment). The series started with analyzing payment history and then moved “upstream” to purchase history and associated PO line-item detail. What we glossed over, however, is the "bookends" of the transactional purchasing process, namely the requisitioning and receiving process. Now, you may ask yourself why we are focusing on these sub-processes. I mean, these are just transactional processes, right? None of these are really strategic, right? Well, yes, and no

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Social Media and the CPO [Plus +]

- October 23, 2014 2:32 AM

macbook-air-notebook-technology-1168-825x550 For a recent workshop in London, I prepared a session titled "From Facebook to Supplier Collaboration - how social media is changing procurement.” As well as being one of the more enjoyable topics to research (I got to know far more about vloggers and Haul Girls than I really needed to), it is actually a huge and fascinating topic once you really get into it. And it goes way beyond just keeping your LinkedIn profile up to date, which is about as far as many CPOs and senior professionals get. So in this piece we will get into an overview of the subject and start focusing on the key principles of social media, which then suggests what CPOs, procurement directors or similar should be considering in terms of actually making use of the tools - we'll cover that in Part 2.

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50 Shades of Pay: Shade 4 – Analyzing Total Spend, Payments by Supplier Type [Plus +]

- September 18, 2014 10:27 AM

money in the form of some coins In our previous ‘shades’ (begin with Shade 1 here), we helped describe a foundational capability: to analyze and make visible how much money has been paid to suppliers. We also discussed how to wrangle the supplier master data that feeds the payment data that in turn, feeds the analytics. Now, in this Spend Matters Plus Research brief, Chief Research Officer Pierre Mitchell explores and classifies the types of suppliers with which you've held transactions to analyze your spend – ultimately signaling the shift from spend analysis to supply base analysis.

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