Plus or PRO Content

CRM for Procurement: Lessons from the Sell Side [Plus+]

In a world where everything is quickly becoming a service (XaaS), perhaps the single most important differentiator is being customer-focused and aligned in order to allow you to deliver value to them over the long run. It is a simple principle, but procurement is not so easy to implement. Everybody who spends money in the enterprise has the potential to get more value from their spend and is a potential “customer” for procurement to help. Given procurement’s limited resources, adopting and adapting CRM principles, practices, and tools can help. As we get started, note that CRM for “supply” and suppliers is not the buy-side of “SRM” or supplier management – it’s a much bigger, hairier, and more encompassing beast.

So who are the customers? And should they even be called customers?

Many procurement organizations do not like the term “customers.” Some use the term “clients,” and others use the term “stakeholders.” Still others use the term “internal partners.” It doesn't really matter as long as the organization defines the nomenclature that works best for them. That said, it is important to understand who all the various stakeholders are within the procurement process, so that they can be appropriately targeted to drive more value out of the process. In fact, if you think of the term "stakeholders," it means anyone who has a stake in the process and who consumes the outputs of that process: information, materials, services, cash, goodwill, etc.

So, to be a stakeholder in a procurement process means to be a customer of that process. This means that procurement needs to be explicit in defining and working with 10 key stakeholders – and reconciling which of these will get the most attention.

Let’s get to the list (and beyond that, 14 critical areas of CRM begging to be addressed).

Tradeshift and IBX: Partner, Customer and Competitive Analysis [PRO]

change of control clauses

The combination of Tradeshift and IBX changes the procure-to-pay (P2P) competitive landscape. Last week, we reported on the transaction and offered an initial analysis of what IBX will bring to Tradeshift. This Spend Matters PRO research brief provides an initial analysis for current and potential customers and partners of Tradeshift and IBX. It also provides insight and analysis on how the transaction will alter the competitive landscape.

Serex: Vendor Snapshot (Part 2) — Product Strengths & Weaknesses [PRO]

RFP

Procurement groups often emphasize different strategic sourcing technology requirements based on the needs of the organization. For some, capturing and automating a basic RFX process through the most easy-to-use technology is a top priority. For others, advanced bidding/auction format and highly detailed cost breakdown capabilities take center stage. Still for others, the most highly sought after capabilities are those that allow them to reimagine the strategic sourcing process entirely by fully considering both external (i.e., supplier, supply market and supply chain) and internal constraints. Yet other companies just want a reverse auction solution that maximizes the efficiency and speed of their teams for simple (“three bids in a box”) and complex (thousands of line items) bids alike. It is this latter procurement organizational profile that is likely to most appreciate the e-sourcing capability that Serex, a recent entrant into the procurement technology market, provides.

This Spend Matters PRO Vendor Snapshot explores Serex’s strengths and weaknesses, providing facts and expert analysis to help procurement organizations decide whether they should consider using as a core strategic sourcing technology. The first installment of our analysis provided a company and solution overview and a recommend fit list of criteria for firms considering Serex. Part 3 will offer a SWOT analysis, user selection guide, competitive alternatives and additional evaluation and selection considerations.

Solution Analysis: What IBX Brings to Tradeshift and How the Combined Provider Stacks Up [PRO]

Tradeshift announced earlier this week it would acquire IBX Business Network from Capgemini, the previous owner of the procurement technology and supplier network provider. Spend Matters analysts Xavier Olivera and Jason Busch recently had the chance to speak to the Tradeshift team about the acquisition. They, along with other members of the Spend Matters research team, have spent time reviewing IBX’s source-to-pay solution in detail.

This Spend Matters PRO analysis provides an expert solution perspective on what IBX brings to Tradeshift, including IBX’s strengths in the e-procurement area. It also provides a brief discussion on how Tradeshift plans to integrate IBX into its solution portfolio, including planned (rapid) migration. Finally, it includes a March 2017 SWOT framework and March 2017 summary company analysis and graphical comparative overview of Tradeshift’s solution footprint and capability (inclusive of IBX) across the source-to-pay continuum in the sourcing, analytic, contract management, supplier management, e-procurement and invoice-to-pay functional areas.

Additional Spend Matters PRO analysis to follow in a subsequent research brief will include customer recommendations, partner recommendations and an analysis of the changing competitive landscape for source-to-pay suites, networks and platforms. Additional Spend Matters news coverage will share what we learned from our discussions with the Tradeshift team following the announcement.

Serex: Vendor Snapshot (Part 1) — Background & Solution Overview [PRO]

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Serex is a relatively new (and still nascent) entrant in the strategic sourcing technology market. Serex is one of over more than 30 vendors that Spend Matters tracks that offer capability in this area. However, it is not a new firm. Serex was founded in 1993 and began to focus on supporting CRM and marketing automation for customers as its core business. In fact, it developed strategic sourcing technology at the request of one of its sales/marketing automation clients, an organization that had tried more than a dozen different e-sourcing solutions and could not find one that met its needs. Serex took up the challenge to architect a new sourcing approach and its current solution, which addresses only part of the requirements of end-to-end of strategic sourcing technology today, offers a different take on enabling reverse auctions in a highly efficient manner for buyers and suppliers alike.

This Spend Matters PRO Vendor Snapshot provides facts and expert analysis to help procurement organizations make informed decisions about Sexex as a potential provider of sourcing technology capabilities. Part 1 of our analysis provides a company background and detailed solution overview, as well as a summary recommended fit suggestion for when organizations should consider Serex in the procurement technology area. The remaining parts of this research brief will cover product strengths and weaknesses, competitor and SWOT analyses, and insider evaluation and selection considerations.

Digital Service Providers: Do They Require Your Attention and Why? (Part 2) [PRO]

crowdsourcing

In Part 1 of this series, we described and unpacked the topic of digital platform-based service providers, which represent a modest but growing spend category far outside of the scope of contingent workforce and services (CW/S) procurement programs. While they are not on procurement’s radar, Spend Matters believes these providers will increasingly become a significant part of organizations’ services consumption and spend over the next 10 years.

In Part 2, we review what is arguably the most successful sub-segment of these digital service providers, as well as revisit the question of whether they require your attention and why.

Decideware: Vendor Snapshot (Part 3) — Summary & Competitive Analysis [PRO]

Visually

In the world of marketing “spend,” there is a decisive irony. On one level, agencies (and marketing organizations) tend to leverage extremely detailed analytical data (campaign performance analysis, competitive reporting, etc.) to manage and improve digital marketing efforts. Yet marketing and procurement organizations still tend to apply a less quantitative and rigorous approach to managing agencies of record themselves, including selecting them for specific projects and campaigns in a truly analytical manner.

In short, applying a category lifecycle management approach to strategic marketing services providers remains more art than science. And today, only a minority of procurement organizations typically having the upper hand — or an equivalent — as an agency when it comes to the age old question: “Who is managing whom? Granted, while digital campaigns may be managed and administered in a rigorous analytical manner, agency relationships and project/program selection are not.

Many procurement organizations work — or have worked — with consultants at one point in time to develop strategies and implement programs to shift this equation. Yet far fewer have invested in technology to address the same challenge. Decideware is the only technology vendor we have encountered that specializes in addressing this challenge, albeit the level of maturity in customer deployments and usage varies dramatically (based on the organization).

This third and final installment of this Spend Matters Vendor Snapshot covering Decideware provides a SWOT analysis of the provider and offers a competitive segmentation analysis. It also provides a summary analysis and recommendations for companies considering Decideware and some of the general challenges organizations encounter in attempting to strategically manage the lifecycle of agency engagement from a procurement perspective. Part 1 provided an in-depth look at Decideware as a firm and its specific solutions, and Part 2 gave a detailed analysis of solution strengths and weaknesses, as well as a review of the product’s user experience.

Risky Business — Our Illogical Attitudes to Risk, Regret and Gambling [Plus+]

supply risk

We've featured aspects of Daniel Kahneman's brilliant book, Thinking Fast and Slow, over a number of articles looking at his concepts such as Priming and Anchoring, and in particular what they (and other ideas he and others in the field have developed) mean for procurement professionals.

Kahneman won the Nobel Prize for Economics, with his collaborator Amos Tverksy — not bad going for two psychologists. And the work that led to the prize was largely around the area of risk, which is what we will look at today.

He and Tversky showed that the assumptions economists made about human behaviour — that we acted rationally in hard economic terms — could be proved false. That meant many of the standard economic models and theories were also flawed, which rather upset many in the economics community!

Kahneman called the strange beings who behaved in this perfectly rationally manner "econs" as opposed to "humans," who behaved — well, like humans do. And his work on risk shows exactly why the assumptions of rationality doesn't hold up. Our decisions aren’t rational — but driven by factors like the “endowment effect,” risk-aversion, and regret.

There is obviously a huge amount of detail that we could look at here — an entire Nobel Prize's worth, we might say. But we will just focus on a few key conclusions and a handful of implications for procurement. As before, we strongly recommend you read the book if this interests you (and, really, it should).

So let’s get into three key Kahneman findings.

Decideware: Vendor Snapshot (Part 2) — Product Strengths and Weaknesses [PRO]

marketing

In the marketing spend category, sourcing an agency is not necessarily a fair description of the process of selecting an agency of record. Unlike suppliers in the majority of categories, when it comes to strategic marketing spend, the source-to-pay process does not focus significant effort on the collection of catalog data, certificates, insurance and other documentary elements relating to real world products — or, for that matter, rate card, job classification or other contingent labor specifications. Rather, the process emphasizes the collection of information on key resources, representational projects and campaigns and production fees, and often includes the equivalent of a paid pilot or test run as part of the competitive process.

Sound unique? It is. Even agency self-identification and validation is different. For example, each agency can say it’s a "digital" expert and may even offer software to help track digital results and performance. We call this “fox watching the hen house” syndrome when an agency offers technology to monitor itself. But if more than half of a firm’s revenue comes from media management (planning, buying, reselling), digital may in fact be a secondary core competence for them.

Decideware offers a specialized suite of capabilities that address the nuances of managing agency spend and supplier engagement. This Spend Matters PRO Vendor Snapshot explores Decideware’s strengths and weaknesses, providing facts and expert analysis to help procurement organizations decide whether they should consider it as an underlying technology solution to manage their marketing and agency spend. The first installment of our analysis provided a company and solution overview, as well as a recommend fit list of criteria for firms considering Decideware. Part 3 will offer a SWOT analysis, user selection guide, competitive alternatives and additional evaluation and selection considerations.

Decideware: Vendor Snapshot (Part 1) — Background & Solution Overview [PRO]

Torchlite

Trying to apply a generic source-to-pay technology solution to marketing spend at the agency level would be the same as using a mountain bike to compete in the Alp stages of the Tour de France. Both less favored approaches could certainly work, but the pack would leave you far behind on the first hill. Moreover, the strategic sourcing processes for marketing spend can look materially different than for other categories.

Granted, when it comes to procuring and managing agencies, sourcing best practices apply at a meta-level, but their implementation is drastically different from the identification of vendors through the award of a contract. For example, in agency sourcing, the goal, of course, is to enable optimal resourcing, project outcomes and key deliverables based on specialized knowledge and skills brought together to arrive at a targeted objective. It is also important to ensure these elements come together and do not deviate from the methodology and underlying creative components that drove the selection of a particular agency in the first place, although the ultimate campaign may in fact change from an original pitch as an agency learns more about the project, client and situation later in the process.

It is within this unique category, with truly unique requirements, that Decideware, a global provider of an agency lifecycle management solutions, presents a compelling case for a category-specific strategic procurement solution that is fundamentally different than standard procurement suites. This Spend Matters PRO Vendor Snapshot provides facts and expert analysis to help procurement organizations make informed decisions about Decideware’s specialized procurement technology capabilities — and showcases one approach to agency sourcing and management based on Decideware’s methodology.

Part 1 of our analysis provides a company background and detailed solution overview, as well as a summary recommended fit suggestion for when organizations should consider Decideware in the procurement technology area. It also explores the strategic sourcing process for the procurement of agency services. The remaining parts of this research brief will cover product strengths and weaknesses, competitor and SWOT analyses, and insider evaluation and selection considerations.

Next-Generation Digital Service Providers: The Who, What and Why for Services Procurement [PRO]

An increasing number of digital, platform-based service providers are appearing today, and while they now represent a small category far outside the scope of most contingent workforce and services (CW/S) procurement programs, the spend they account for is growing.

Back around 2010, traditional BPO providers sought to introduce clients to digitally turbo-charged offerings. Though similar in concept, the providers appearing today represent a whole new generation of platform-based service providers, many of which were startups or didn’t exist in 2010. They did not arise with the scale and legacy of the BPO providers, nor did they occupy the category of major service providers of which procurement was aware and already oversaw.

Far from a passing fad, these next-generation digital service providers will become an increasingly significant segment of services consumption and spend over the next 10 years. We base our projections on solid, long-term trends evidenced in both the consumer and business sectors.

This Spend Matters PRO research brief defines this new generation of digital service providers and poses the entirely open question of whether they require the attention of procurement organizations tasked with managing services spend at this time.

eBid Systems: Vendor Snapshot (Part 3) — Summary & Competitive Analysis [PRO]

contract

Spend Matters has often noted that the market for strategic sourcing solutions is highly fragmented, with no clear leader or collection of leaders. This stands in contrast to the e-procurement and invoice-to-pay markets, where best-of-breed vendors are still thriving but consolidation among larger providers is influencing industry dynamics and many selection processes. Yet within the strategic sourcing market, it is difficult to point to any single vendor or set of vendors, look at any metric and say anything but vendor fragmentation is the rule.

This is both a positive and negative for providers like eBid Systems, given the challenge of competing against so many providers rather than aiming at a single target. Within this competitive environment, this final installment of our Spend Matters PRO Vendor Snapshot series covering eBid Systems offers a competitive analysis and comparison with other strategic sourcing providers for shortlist consideration. It also includes a SWOT analysis, user selection guide, summary evaluation and selection considerations. Part 1 and Part 2 of this PRO research series provided a company and deep dive solution overview, product strengths and weaknesses and a recommended fit analysis for what types of organizations should consider eBid Systems.