There’s a new strategic sourcing philosophy and capability on the market: market-informed sourcing. In this 2-part Spend Matters PRO research brief, Thomas Kase, vice president of research, explores the concept of market-informed sourcing and where it can take us – past where regular sourcing suites break down (even some of those with sourcing optimization). He also provides an in-depth look at one of the providers making market-informed sourcing a reality: Trade Extensions.more ▸
Earlier this month, Spend Matters published a story highlighting Auto News’ coverage of supply chain and procurement localization at Magna International. On the surface, supply chain localization seems simple – work with local suppliers in the areas where you do business globally. Supply chain localization is far from easy – in fact, its requirements and practices are often incongruous with some procurement and supply chain trends leading to greater centralization of efforts and management.
Moreover, without the right structure and design – not to mention technology – the supplier localization efforts can overwhelm individuals (e.g., category managers) tasked with global oversight of specific sourcing and related supplier management efforts.
So what enablers can procurement and supply chain organizations turn to as they move toward localization given this context? There's a bunch. Read the full post to find out what they are.more ▸
Sourcing in Latin America (with Mexico Focus): A Primer for U.S. and Canada Procurement Organizations [PRO]
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 ▸
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.more ▸
Earlier this spring, Coupa provided a briefing and demonstrated a version of its latest inventory module to Spend Matters. Coupa sells its inventory module as an add-on to core procurement but separately from accounts payable, contracts management, and other suite components. But the question remains: in its initial release, does it provide enough value to justify the added cost and modular expansion for companies using other Coupa suite components?
After seeing it, Chief Research Officer Pierre Mitchell and Managing Director Jason Busch argue in this Spend Matters PRO research brief that Coupa’s new inventory management capabilities are likely to bring the company closer to marginalizing the expansion of an ERP value proposition in middle market deployments (but not necessarily a fit with larger customers who are likely to have more sophisticated processes than the tool can handle – let alone inventory management systems already in place).more ▸
Collaborative workspaces are clearly a trend in solutions right now. With so much more data moving through all systems, better ways of managing it becomes critical. Drinking from a faucet is easy, but trying to drink from a fire hose can knock your teeth out. Most recently, at IBM’s Smarter Commerce Global Summit 2014, the collaborative workspace approach was announced as their Multi-Enterprise Relationship Management initiative. There are other sourcing providers who have seen the collaboration light as well. We have covered a group of direct materials sourcing solution providers earlier – for example, Directworks. In their case the collaboration is understandably more focused on products and components – but the recognition that capturing collaboration activities inside a procurement platform or solution is essential to optimal sourcing is the same. Another example would be SuccessFactors. Acquired by SAP a few years ago, this company has solutions that hold considerable promise for enhanced collaboration functionalities for the SAP/Ariba procurement suite, but we have yet to hear about a (procurement tool) release that uses this thinking. In this Spend Matters PRO research brief, analyst Thomas Kase looks at what this approach can solve among today’s procurement challenges.more ▸
Where do professional services add value in the sourcing process? This is a good question – and probably one that you are more or less forced to address as you build an end-to-end business case prior to acquiring a strategic sourcing solution. There are many areas where services can add considerable value to any solution – before and during the implementation, through early stages where core leadership is required, and in broader and deeper deployments both domestically and globally. Services are critical to sourcing success – either you handle them yourself or you get a provider to help. In this Part 1 of a two-part Spend Matters Plus series, analyst Thomas Kase shares best practices for before and during an implementation. Part 2 will cover post-implementation and main takeaways.more ▸
In the procurement sector, it’s rare to find a solution provider that, in its operating model and technology, has absorbed so much from those that have come before and applied and updated these learnings to improve on past efforts. But MarketMaker4, an Xchanging company, has done just that. I'm inclined to say that the spirit of Procuri lives on. Similar to Procuri, MarketMaker4 (MM4) delivers a sourcing platform with extensive event support, supplier preparation, and availability in multiple languages. Going beyond Procuri’s offering, MM4 rolls together the sourcing tools with Business Intelligence (BI) and Market Insights (MI) – creating that “market making” effect that a buyer really needs. PRO subscribers can read on for an examination of the solution components, as well as see a list of key takeaways.more ▸
Keelvar: A New Sourcing Tool That Will Change How Old-School CIPS and NAPM Members Negotiate [Plus +]
Over the years, I’ve moderated my views on reverse auctions. I now believe that their most useful legacy was ushering in a world of online communication and management of suppliers and stakeholders before, during, and after negotiations. Moving to the Internet and away from spread sheets (at least in part) opened up an entirely new world of capabilities that could improve the implemented savings that companies achieved through building transparency into the entire negotiation process, which includes internal data gathering and consensus building elements (e.g., SKU rationalization). Yet only the interfaces of some of the newer tools available make the RFI/RFX/RFP process and sourcing easy. And thus far none have embraced the simplification of complexity while leveraging sourcing optimization at the very core. But Keelvar, a tiny, 10-person firm only serving the Irish and UK markets, might just do it. Founded by the still youthful Alan Holland, Keelvar hasn’t set out to sell its tool to logistics organizations and category managers. Rather, Holland approached sourcing optimization to make it approachable for old school public and private sector buyers and purchasing managers who could use the tool to change the way he thought about structuring markets. And starting at $25K a year including help desk/support services, they’re getting a strong following already, especially in the public sector.more ▸
[Editor's note: An earlier version of this post was published on March 24. We have since received updated information regarding MFG.com's new CEO, Bo Hagler, and are republishing this post as a result.] Our long awaited manufacturing e-sourcing analysis is near completion (to be shortly followed by other e-sourcing comparative reviews and rankings). As part of this effort, we will be featuring detailed vendor write-ups in the coming weeks. The first provider we’re tackling is MFG.com LiveSource. We recently spoke with the new majority investors, Fulcrum Equity Partners, who have assured us that they are “looking to grow and invest in LiveSource." We take this as good news, as the solution has much potential in the market. A few members of the MFG.com team have left in recent months, and as of this writing, the company has just recruited a new CEO: Bo Hagler. Mr. Hagler was most recently VP of R&D at QAD, Inc (NASDAQ: QADA and QADB) where he was responsible for supply chain solutions as well as new product introduction – and even if Spend Matters hasn’t had the pleasure of interviewing Mr Hagler yet, his background looks like a good fit for MFG.more ▸
Spend Matters will soon be releasing its comparative manufacturing e-sourcing analysis (to be shortly followed by other e-sourcing comparative reviews and rankings). As part of this effort, we are featuring detailed vendor write-ups, having started with MFG.com LiveSource. The second provider that we are tackling is POOL4TOOL, an Austria-based provider with extensive experience working with manufacturers across the source-to-pay continuum in direct materials (inclusive of supplier management, quality, etc.). With limited investment in North America to date, POOL4TOOL is not as well known outside and around its home market of the German-speaking countries (Germany, Switzerland, and Austria) as perhaps it should be, given the solution breadth and depth. This report covers company background, a solution overview, solution details and analysis, solution differentiators, customer references / experience and recommendations.more ▸
Spend Matters Procurement Provider Coverage: Functionality of Sourcing Suites and Applications [Plus +]
For our Spend Matters Plus subscribers, we wanted to offer some additional details on the functionality of sourcing suites / applications that we didn’t cover in our higher level market sector descriptions. These more detailed capability areas are used in our ongoing evaluation of providers and supporting SolutionMap™ reports that we’re currently building out. In terms of some of the illustrative solution capabilities that we assess in our sourcing SolutionMaps™, we evaluate qualitative assessments, quantitative assessments, post-event analysis & optimization, integration, and much more.more ▸