Process and Best Practice Content

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Procurement Digitalization Has 2 approaches: All or Some

In an increasingly digital world where manual processes are transformed into bits and bytes, the challenge for Procurement Organizations is to stay relevant. Many companies struggle to decide whether a dedicated Procurement function is “good to have” or a “must have,” according to Rahul Devarakonda, Beroe Inc.’s head of product.

Procurement Digitalization” promises to offer an abundance of solutions to multiple problems. But the pressing question is: Can Procurement teams achieve the much-needed centrality if they jump onto the Digitalization bandwagon?

While expectations are high, so are the complexities in implementing digitalization in one’s organization. For example, questions could range from as simple as “where to start” to as complex as “what mix of solutions can bring in more value to operations.” There are solutions in the market that envisage complete overhaul of processes and systems, but Procurement Organizations also can take an alternate approach, which uses a plug-and-play model to digitize certain processes that otherwise consume too much time and effort.

Industry experts weigh in with their assessments for when to do a vast Digitalization switch and when it makes sense to digitalize parts of a company's operations.

Digital Transformation Drives Top Procurement Operations, And Can Help Late Adopters, Report Finds

World-class procurement organizations have achieved enormous advantages through automation and the adoption of technology solutions, according to a new report on digital transformation from the Hackett Group.

The 2018 benchmarking report found that top performers, thanks to their digital transformations, have 21% lower labor costs and 29% fewer full-time equivalent staff than more typical organizations. For this reason, the authors of the report proclaim that procurement is now at an inflection point: While technology has always been effective at helping procurement increase efficiency, “world-class organizations can continue to reduce costs by embracing digital technology, while the peer group can leverage the same technology to catch up faster at less cost.”

Find out how the top performers do it and how late adopters can catch up.

Understand the Risk Big Picture — A Webinar Looking at 2019 Risks

supply risk

Spend Matters UK/Europe’s final webinar of 2018 will be held Thursday with an eye toward risks for 2019. The event, “Understand the Risk Big Picture,” also is the final webinar for Peter Smith as the site’s managing director. Folks in North America can join at 8 a.m. Central, which is 2 p.m. in the UK.

It is being run with riskmethods — which provides a cloud-based supply chain risk management platform/solution, and founder Heiko Schwarz will be participating in the webinar with Smith. They’ll focus on different types of risk: cyber, reputational, political, natural and supplier financial risks.

Join them Thursday as they look at what procurement can do to improve risk planning and management. Please register here for the webinar — and even if you can’t make that time, registering will mean you get immediate access after the event to listen at your leisure.

Year-end ‘Dash for Cash’ — 7 Steps to Free Up Funds Without Resorting to Tricks

It’s the end of the year, time for New Year’s Resolutions, a little vacation time and Christmas Party hijinks. But the Hackett Group, a business consultant and digital transformation specialist, is cautioning against year-end fiscal shenanigans, where money is shuffled around to make it appear that the company has hit the finish line in full stride. A new paper from the group lamenting the yearly “dash for cash” argues that you can look for sustainable, healthy ways of freeing up cash at the end of the year without pulling any three-card-monty tricks. According to the paper on working capital, many companies think it’s too late at the end of a quarter or year to free up significant cash. But it suggests 7 steps you can still use.

How to Limit Nature’s Impact on the Supply Chain

Spend Matters welcomes this guest post from Graham Parker, CEO of Gravity Supply Chain Solutions.

Real-time data will provide visibility and inform decision-making that safeguards the supply chain from the unexpected.

Wildfires, tsunamis, earthquakes and hurricanes.

These are just a few examples of the types of natural disasters the world has experienced in the last 12 months. With California still reeling from the catastrophic impact of the recent wildfires, it is increasingly evident that natural disasters are becoming a regular occurrence.

T&E Benchmarks: How Does Your Company’s Technology Compare on Handling Travel & Expense Reporting?

Oversight Systems

Companies in the U.S. spend hundreds of billions of dollars annually on travel and entertainment — and a study from Certify Inc., an expense report software company, surveyed executives and finance leaders to get a snapshot of how many still use manual methods versus how many have upgraded their T&E management technology. In the study, officials note that travel and entertainment costs can be a significant part of companies’ budgets, which means efficiently managing employees’ expense reports can greatly affect a company’s profits. Since 2013, the “Expense Management Trends Report: Annual T&E Outlook and Benchmarks” by Certify has worked to help companies of various sizes recognize best practices to consider in travel and entertainment reporting and as methods to benchmark such companies’ current processes against their peers.

Efficio Panel Debate: Good Banter, Robot Jokes and 3 Points About the Future of Procurement

Last week in London I participated in one of the livelier and more spirited panel debates on the future of procurement (skills, technology and more) in recent memory. The event, held at Efficio’s offices Thursday to mark the release of its latest report, “Procurement 2025: Is Digital Transformation Driving More Effective Procurement,” included not only a handful of esteemed panelists and facilitators from the procurement/CPO, consulting and academic ranks, but also a robot — which led to many robotic process automation jokes throughout the discourse. If Efficio does something like this again, ask them for an invitation — you won’t be disappointed!

Here are three points that stuck in my mind from the different panel discussions and chats that I had.

Extinction event: Amazon Textract has just killed the OCR industry. Who’s next and who’s safe?

disruption

Spend Matters welcomes this guest post from Doug Hudgeon, a business automation expert.

The annual Amazon AWS Re:Invent conference has just finished. The most interesting announcement in the conference was not one of high-profile changes to their serverless and machine learning platforms. The most interesting announcement was a three-minute video about Textract, a new OCR (optical character recognition) service from Amazon. This service extracts text and tables from documents and is priced at $1.50 per 1,000 pages.

The Textract OCR service is interesting for three reasons, each of which is worthy of an article in itself, but we'll briefly look at all three here and the industries that are affected.

Join the Coupa Webinar Tomorrow to Learn About Community Intelligence

Spend Matters UK’s procurement veteran Peter Smith on Tuesday will join Coupa’s John Callan for a webinar in the UK about developments in community intelligence, the idea of driving benefits through a community of organizations that are each buying separately but look to collaborate in some way.

Leading procurement/spend management firm Coupa is hosting tomorrow’s event, “Community Intelligence — A Procurement Revolution.” The time of the webinar was changed to accommodate the North American audience, so sign up here and join the 45-minute session at 9 a.m. Central time (3 p.m. UK time), and bring your questions about community intelligence.

“Advances in technology, driven by firms like Coupa, are increasing the potential for benefits from it, making it a significant tool for procurement and one which we believe procurement leaders need to understand,” Smith says in a preview of the event.

Procurement’s New Reality: A Business Case Blueprint for Innovation

Procurement is a critical function, yet it has challenges being seen as a strategic and transformative player, despite its enormous potential to drive enterprise cost savings and growth. However, forward-thinking procurement professionals are radically transforming business as usual and sitting alongside other key changemakers within the enterprise. Many of these forward-thinking procurement leaders have taken note of the huge digital transformation effected by sales over the last 20 years and have applied many of these operational tactics to sourcing. By emulating the sales framework and approach, procurement executives can usher in a new era where they can better establish priorities, allocate resources, engage stakeholders and react to changing directives. In the process, procurement will also deliver maximum business impact, with a new respect there for the taking.

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A Simplified Approach to Indirect Spend Management

digital

The consequences of poor indirect spend management can be costly — overspending, lack of visibility and control, and too many suppliers doing too little. Having poor visibility into your indirect categories means you have no real understanding of your actual spend, cash flow and working capital status. This can lead to an inability to apply cash to the business when needed. Additionally, CFOs often significantly underestimate indirect expenditures. The reality is the lack of visibility into what you are spending day-to-day can be up to 40% of your total spend. Here are four steps to get control of your indirect spend.

Gary Hare Talks Amazon Business and Turning the Internet into the ‘World’s Largest Supplier Network’ (Part 2)

“I think the market is going to move from being buyer-centric ... to supplier-centric. [Suppliers] need help going digital,” says procurement veteran Gary Hare. “We really have no choice if we want to get this right.”

Hare’s assessment came during a discussion about Coupa’s purchase of Aquiire and the future of e-procurement shopping, which he says involves a way of outworking Amazon Business and turning the internet into "the world’s largest supplier network." He knows the issues because until 2009 he led Vinimaya before it rebranded as Aquiire. Hare, now the CEO of Vurbis USA, talks about the future of e-procurement in Part 2 of this Q&A, which has been edited. Part 1 ran Monday.