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Procurement Technology

Coupa’s Open Buy Solution with Amazon Business is a Game-Changer for Unified Catalog Management and Real Guided Buying [PRO]

Electronic catalogs are a pain in the ass. Twenty years ago, early e-procurement implementations were always dragged down by the work required to build electronic catalogs. And things haven't changed that much. The problem is that you force suppliers to publish (i.e., replicate) catalog content to their buyers’ various system or to electronic marketplaces — unless you use supplier-hosted catalogs that you “punch out” to. This is nearly always implemented as a Level 1 punch out, where the poor buying employee has to click on various supplier icons to get to the right websites where their buying experiences are controlled by the seller (i.e., “guided selling”) rather than the chief procurement officer (CPO) preferred metaphor of guided buying.

The next level of sophistication is a Level 2 punch out, where supplier catalog content sits next to internally curated corporate catalog items before a punch out occurs when the right item is found. The problem, however, is that a supplier still has to syndicate (replicate) all of the content that a CPO wants to expose to corporate employees. And it’s even worse because the type of catalog items in question are broad assortments of infrequently ordered items that make up tail spend. Are you really going to get someone like Amazon Business to syndicate content from hundreds of millions of items to your buy-side catalog? No. Also, the number of suppliers that support Level 2 punch out is extremely low (perhaps fewer than 100 suppliers globally), which is not surprising given that they have to syndicate massive catalogs to multiple channels. Syndication/replication is not a great long-term answer for anyone when an API can be built to serve up the content on demand.

Speaking of Amazon, Coupa has worked with Amazon Business to develop a Coupa solution called Open Buy. The offering changes the paradigm to allow “guided buying” through a more unified experience that actually implements Level 2 punch outs properly in a way that’s palatable to the CPO, employees and the supplier (i.e., Amazon Business doesn’t currently support the existing Level 2 punch out scheme — and we don’t blame them). In this Spend Matters PRO brief, we’ll examine how Coupa Open Buy works, how it’s different and some strategic implications for the market.

What To Expect from Best-in-Class Spend Analysis Technology and User Design (Part 5): Looking Ahead [PRO]

As we conclude our series on spend analysis, we turn our attention to how best-in-class solutions can support three requirements that go beyond the basics of what most organizations have implemented today. These enabling capabilities are already (and will become even more) important for procurement to be effective at addressing, through analytics, business objectives as it strives to become more effective as both a value-generating and compliance-oriented function. The three components are: providing specialized tail spend analytics, permissive analytics and real-time maverick (or off-contract) spend identification. The remainder of the series (see: Part 1, Part 2, Part 3 and Part 4) explores what the fundamental building blocks of best-in-class analytics technology and user design look like today and will look like in the future.

Solution Provider Product and Technology Roadmaps: Are They Important? [PRO]

spend visiblity

The short answer to the question posed in the title is emphatically and definitively “yes” — now more than ever. When screening or evaluating technology solution providers for e-procurement, contract lifecycle management, vendor management systems (VMS) or any other solution, there is frequently an inherent present and backward-looking bias in evaluating and making decisions about these solutions. Considering only what solutions have done or are doing for their clients (and ex-clients) only tells so much about whether or not the solution is a good fit.

There are probably a number of reasons for this bias, including that it may have led to optimal decisions in the past because vendors often over-promised and only partially delivered. But in today’s world, this bias can handicap a procurement organization given the growing number of new solutions and rapid changes in technology. Whether intentional or not on the part of the solution provider, “adverse selection” may come into play here — to the detriment of all. By not knowing where a provider plans or intends to (or actually can) take its solution in the future, the buyer is missing crucial information that could result in a bad decision. Making sure that roadmaps are reviewed and analyzed is an important way to mitigate this risk.

In this Spend Matters PRO research brief, we explore this problem and make suggestions to support ways to move beyond it, including how to look at a provider’s product and technology maps from a 2017 cloud-era frame of reference. For those who are new to this topic, we start with the basics, providing an explanation of what vendor product and technology roadmaps are, what they should contain and what you should expect.

What To Expect from Best-in-Class Spend Analysis Technology and User Design (Part 3) [PRO]

data analytics

Evaluating the merits of spend analysis solutions (by user role) is inherently complex given that a spend data analyst, a data management QA individual, teams, category managers, other procurement users and business stakeholders will interact with the application in different ways. An ideal solution for one user “type” may be unacceptable for another. For example, some groups will care deeply about granular data import/export capability while others will judge an entire solution by its reporting. Still others will marvel over the ability to classify or reclassify data in certain ways on the fly. But one commonality regardless of user role or interest for spend analysis is that the intersection of best-in-class technology with best-in-class user design is becoming inseparable. Form and function are both leading (and following) each other.

This Spend Matters PRO series explores how these areas can come together across a spend analysis application to transform how users interact with data and what they can do with it as a result. In the Part 1 of this series, we explored what separates out spend analysis dashboard approaches that are a distraction (at best) from those that are an invaluable component of an overall solution. In Part 2, we analyzed all of the nuances of optimal filter definition and dynamic cube views (and creation), including exploring what a truly flexible and dynamic filter capability consists of, as well as explaining the essential elements of formulaic and ranged dimension capability and real-time/scalable spend cubes (and why they matter, even for a typical user).

In this installment, we turn our attention to the intersection of the best technology and user design combinations covering optimal approaches to data import/export in different formats, “idiot-proof” data categorization system design and reclassification of data.

What To Expect from Best-in-Class Spend Analysis Technology and User Design (Part 2) [PRO]

Analytics

Like many other procurement technology enthusiasts, the co-authors of this report tend to put quite a bit of emphasis on just the spend classification components when considering spend analysis technology. But just as important as accurate spend classification is what one does with the data once it is available in a usable format. In the first installment in this series, we provided an insider look on what differentiates spend analysis dashboards that are a distraction (at best) from those that are an invaluable component of an overall solution.

As this Spend Matters PRO series on what separates out best-in-class spend analysis technology and user interface capabilities from the vendor pack continues, we turn our attention to the nuances of optimal filter definition and dynamic cube views (and creation). This includes exploring what a truly flexible and dynamic filter capability consists of, as well as explaining the essential elements of formulaic and ranged dimension capability and real-time/scalable spend cubes (and why they matter, even for a typical user).

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

There seems to be a near universal playbook for spend analysis solution providers when it comes to positioning the capability they deliver. You’re not alone if you think many vendors sound interchangeable (despite claims of “enrichment accuracy” or dashboard superiority). To be candid, based on our survey of many solutions in this market as part of PRO Vendor Snapshot reviews and, more recently, our SolutionMap comparative analyses, a good many are. But they’re fungible in a way that is not necessarily negative, especially those that tend to rely more on services and less on technology to drive data management efforts.

Still, best-in-class technology and usability matter. And while we do not disagree that spend analysis must center on — and span the gamut of — spend data acquisition from disparate sources, data cleansing, data classification, data enrichment and data analytics via a BI/data presentation layer, the devil is truly in the details when it comes to what to look for in a best-in-class solution both from technology and user interface capabilities. As with e-sourcing (Part 1, Part 2), reverse auction capability (Part 1, Part 2) and sourcing optimization (Part 1, Part 2, Part 3, Part 4), the gap that separates out top performing solutions from everyone else is getting wider, not narrower.

This multipart Spend Matters PRO series examines the components of spend analysis solution capabilities in the technology and user experience areas that represent best-in-class today — and the intersection of how emerging features and capability are interacting (and driving) an optimal user experience. In this first installment, we consider the optimal interactive spend analysis dashboard.

What To Expect from Best-in-Class Sourcing Optimization Technology and User Design (Part 4) [PRO]

spend analytics

We’ve often wondered why sourcing optimization technology is not more broadly adopted today alongside or as a replacement for traditional RFX and reverse auction approaches. One of the major reasons why procurement-led optimization efforts have not yet crossed the chasm (outside of transportation spend) is that because until recently, many solutions were challenging to use without considerable training. In addition, most of the technologies available were not effective enough “out of the box” at tackling anything but logistics sourcing opportunities or somewhat simplistic bids and constraints. And, of course, not enough procurement organizations were even aware of all of the benefits optimization can bring above and beyond standard software-driven strategic sourcing efforts.

But these hurdles are disappearing — fast. This Spend Matters PRO series is meant as a primer for both sourcing optimization solution “buyers” and solution “builders.” It provides a look at what is required to use and field a best-in-class sourcing optimization solution today from both a technology and user design capability. The three previous installments can be found here and here and here. As we conclude our analysis in Part 4, we consider the areas of constraint impact analysis, scenario generation and reporting/analytics.

Extending Procurement Information Architecture to Provider Ecosystems (Part 3) [Plus +]

Infrastructure and related platforms delivered as a service (i.e., IaaS and PaaS) are becoming the new battlegrounds for the mega vendors who want to own the platform ecosystems that create the cloud applications and the business networks that connect the applications. SAP has clearly tossed more than just its hat into the ring wanting to capture as much territory as possible in the competitive land grab that is just beginning in this area. Over time, the emergence of integrated capabilities and interoperability will be good news for technology buyers, because they will help standardize and better manage the flexible procurement information architectures that we are advocating. Yet in the short term, this bottoms-up infrastructure overhaul isn’t of much use. So, many vendors are taking a leadership position in certain aspects of such infrastructure or focusing on the top-most business process aspects of such platforms.

What To Expect from Best-in-Class Sourcing Optimization Technology and User Design (Part 3) [PRO]

So far in our series on sourcing optimization (see Part 1 and Part 2), we’ve covered how the intersections of specialized technology capability and user design must come together to support a best-in-class experience. Specifically, we’ve fleshed out the following areas by describing what is important to look for (or build) into a solution on both a functional and user experience perspective: constraint support, mathematical foundations, cost modeling, e-sourcing and reverse auction integration approaches, guided sourcing and automatic missing data and outlier identification. Today we turn our attention to how world-class sourcing optimization capability can address the automatic identification of unsatisfiable constraints and the tricks of the trade to fix them.

What To Expect from Best-in-Class Sourcing Optimization Technology and User Design (Part 2) [PRO]

Sourcing optimization has played a somewhat curious side role in the history of e-sourcing technologies. Approximately half a dozen procurement vendors have offered varying degrees of capability over the years, but customer adoption, especially in the user base of vendors offering other sourcing and procurement technology suite capabilities, has remained variable, as have the capabilities of the underlying optimization solutions themselves.

As we noted in the first installment in this series, sourcing optimization is “heady, complex and requires significant mathematical, technical and domain expertise to use” — at least in the past. It’s not a common skill combination. Developing and supporting such capability has also required skilled R&D (academic), product development and product management resources, so assuming you could find the right people, adding sourcing optimization to existing sourcing products required significant investments.

This Spend Matters PRO series provides a “how-to-guide” to selecting and developing best-in-class sourcing optimization technology, inclusive of a user design and interface that can maximize adoption. We suspect it will be useful for procurement organizations, consultants, business process outsourcing (BPO) firms and third-party logistics (3PL) providers evaluating or cobbling together solutions to use internally or own behalf of customers.

But this brief should also be equally valuable for technology vendors that are looking to build capability in the area, or improve upon existing sourcing solutions. In Part 1 of this series, we explored how powerful constraint support, solid mathematical foundations and advanced cost modeling capability must come together in a solution that dovetails best-in-class functional capability with optimal user design. In this second installment, we turn our attention to e-sourcing and reverse auction integration approaches, guided sourcing “what-if” support and automatic missing/outlier data identification.

Extending Procurement Information Architecture to Provider Ecosystems (Part 1) [Plus +]

In our previous series on procurement services provision and information architectures (here, here, here, here, here, here and here) we discussed the importance of thoughtfully designing various architecture elements such as MDM, analytics, workflow, portal infrastructure, etc. to re-frame overall information capabilities beyond the traditional provider-led “module-menu” approach. Simply put, the idea is to loosely couple these capabilities so that they can be iteratively improved (and switched out as needed) while they squeeze more value out of the fragmented information topologies that litter the enterprise landscape. The coupling of these capabilities can – and should – create situations where the sum of a set of assets greatly exceeds their individual contribution elements.

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.