Accenture Spend Trends Report: MRO Category Intelligence – Not One Category, Not One Opportunity (Part 2)
In the first part of our update on MRO (maintenance, repair and operations) sourcing trends, we highlighted a number of our own observations as well as those that Accenture made in its recent Q2 . As our analysis continues, we turn our attention, courtesy of Accenture, to the area of supplier innovation and material substitution and how to access it. Accenture suggests there is no substitute for face time when it comes to learning from MRO suppliers. Specifically, attending supplier conferences is an important place to learn.more ▸
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.more ▸
An Oracle ERP Procurement Update will take place this Thursday, September 18 at 10 a.m. CDT. Chief procurement officers, practitioners and Plus/PRO members are encouraged to join us for this pop-up webinar that will explore the current state of ERP procurement and what to expect from Oracle’s procurement product lines. Register today!more ▸
Public Spend Matters Europe: Spend Matters Talks to Peter Smith on Importance of New EU Site (Part 1)
The Spend Matters Network recently launched its third European website Public Spend Matters Europe, which is dedicated to bringing you the latest news and information on government procurement throughout the continent.
The Spend Matters UK/Europe website has been up for four years, and despite its name, it has focused on procurement - and often public procurement - largely in the United Kingdom. What will set the new Public Spend Matters Europe website apart, however, is its more broader European focus, covering the continent from Ireland to Finland, from Portugal to Greece.more ▸
The bigger the organization, the more political the decision-making process is – a maxim all too familiar to most of us. Sourcing, by definition, will step on numerous toes as it navigates the shark infested organizational waters toward better total cost and value outcomes. Internal silos and fiefdoms will have to be cracked open in order to create the best results.
Along the way, as we have all seen, many worthwhile initiatives fail for the lack of adoption sword – the unimplemented savings – as the industry euphemism goes for the negotiated savings that the sourcing team created, but the business users passive-aggressively ignored. Even worse, relationships, both internal and external, take a turn for the worse as toes are crushed under a well intended, but perhaps awkwardly placed, sourcing boot. Some stakeholders run for the mattresses and start sniping you. Others approach the procurement challenge as a no-knock, no-survivors SWAT team effort, doing more harm than good; equally destructive of long-term trust with stakeholders and suppliers.more ▸
My old employer The Hackett Group sent me the results of their latest annual study on working capital performance (a downloadable version of the study can be found here). Hackett’s subsidiary REL Consultancy (or “REL” for short) annually extracts, adjusts, and reports on the working capital performance (and overall financial performance) of the top 1,000 publicly traded firms in the United States. For context, the average firm turnover is $11 billion in revenues and median turnover is $4 billion.
REL runs its business primarily based on a singular assumption and value proposition: Reduce your Days Working Capital (DWC) because less working capital is better for the business. Cash that is “liberated” from balance sheets can be used for stock buybacks, R&D, M&A, etc. Improving working capital is a no brainer, right? Unfortunately, this story is just that: a nice story.more ▸
Yesterday, Tungsten announced its acquisition of DocuSphere, a niche provider of accounts payable automation and integration technology that largely flew under the radar of most finance and procurement organizations in the sector (its entire 2013 revenue was less than some of the larger accounts payable automation deals that have been completed in recent years). e can largely conclude that the acquisition was done for two reasons: first, to extend Tungsten’s product capability outside of e-invoicing and supplier connectivity, and second, to bring additional volume onto the Tungsten network.more ▸
Zara, that darling of the fashion world with the most innovative speed-to-market business model, invented the concept of “fast fashion.” The company has received heaps of praise for its innovations that have allowed it to reach more than $20 billion in revenue (see here, here, and here). And, let’s face it, the clothing chain has a lot to offer, particularly if one craves the latest looks. I have shopped there many times. But I can’t say that I will again because of a recent “blunder.”more ▸
In the 120 years that Labor Day has been a federal holiday, it has morphed from a day celebrating the blue-collar working class to a handy if inaccurate marker of the end of summer. As for Spend Matters, instead of the usual programming, here is a run-down of significant news relating to labor from this year.more ▸
A week ago, Spend Matters' Jason Busch wrote a rant about Air Canada Rouge after traveling on the airline’s discount service on his way back from Italy. He later shared some pictures from his flight, which showed gum stuck to the plane’s carpeted floor, a messy lavatory, and grime, food particles, and even hairs (eww) in nooks and crannies of the plane. Needless to say, this post garnered a lot of comments from our readers - some thanking Jason for the warning, others defending Air Canada. Here’s a review of the feedback we received in this edition of our Comments from Readers column. Read on to see what people had to say.more ▸
If I had to choose a spend category to be responsible for, what might that be? Well, I recently met someone who has what might just be my dream procurement job. Richard Kirstein runs Resilient Music, based in London. It is a small advisory and (in a sense) procurement outsourcing firm that advises and helps their clients buy music rights. So when you see a TV advert, or some fancy YouTube viral video campaign for a trendy fashion or drinks brand, and there is some music playing in the background, someone has purchased the rights to use that music.more ▸
I think I’ve found the bottom of the barrel of Star Alliance. While it may be painted “Rouge” on the outside, Air Canada’s new discount service made my family red with anger on the inside. Earlier this month, we took a family vacation to Europe returned from Rome to the U.S. through Canada. The routing that made the most sense – and what first seemed like a great deal in cashing in Citi points – involved an airline-within-an-airline that I had never heard of: Air Canada Rouge. Air Canada Rouge is supposedly a discount airline, but the prices were similar for the transatlantic routes to standard airlines.more ▸