The Spend Matters 50/50 is Upon Us — But What’s Different This Year?

We’ll be publishing the Spend Matters 50 Providers to Know and 50 Providers to Watch on Spend Matters next week, to coincide with ISM’s Annual 2016 Conference. Each year the list changes, and 2016 is no exception.

As our coverage of the procurement and supply chain market expands, so too have the categories of providers that are included, making less room for those in some of the traditional segments and more space in those that we see becoming increasingly important to practitioners.

But don’t yell “quota” on us just yet. Yes, while I personally asked our team to nominate providers in specific areas that were underrepresented in the past yet increasingly important to the future procurement organization, every single nominee had to pass the test of the broader team in multiple rounds of live and Google Sheets collaboration debate. (How did we ever live without Google Docs?)

What Has Changed?

Some areas that we’ve placed greater emphasis on this year included services procurement (with the most new additions), direct materials procurement, trade financing and specialized category solutions (e.g., healthcare, marketing, tail spend). The movement and new faces on the “Watch” list will likely surprise some, but we would not be doing our jobs as analysts and critics if we didn’t shake things up a bit, especially by highlighting emerging segments.

But Why?

Of course, this begs the questions: Why do these emerging segments matter and why did we give them more attention?

I’ll share some insights for three of the segments that are represented on the list:

  • Services procurement: The Spend Matters brain trust believes that procurement is increasingly becoming focused on the buying, provisioning and managing services of all types. From freelance and independent contractor labor that supports creative marketing efforts to complex BPO programs to “power by the hour” models in the aerospace and defense market, if procurement organizations don’t become more familiar with new ways on how to buy and manage services, they’ll become less and less relevant to the business. While we’ve include a number of “traditional” providers on the list, we promise a bunch of names you’re likely not familiar with.
  • Direct materials procurement stands alone as a set of activities that require specialized supporting technologies, processes and information. There’s increasing overlap between these solutions when it comes to functional procurement users — especially when it comes to risk management, master data management, supplier connectivity, analytics and planning — and those within supply chain. Direct materials-centric providers, including technology providers, supplier networks/connectivity providers, consultancies and other solution providers, are well represented on the list.
  • Specialized category solutions, including those supporting healthcare, marketing and tail spend environments, look like little else in the market, yet the lessons they can teach us are important indeed. While we don’t have enough room to call attention to every specialized solution area that we’d like, the ones that made the cut are not only valuable in their niche but also are fascinating to explore through a more generalized procurement lens.

The 50/50 comes straight from the minds that bring you Spend Matters and our network sites. Like Southwest Airlines pilots, we prefer to land and fly the plane ourselves (versus rely on autopilot). We constantly make course corrections based on how we read the instruments and all the other variables around us — perhaps most important the environment we think that we’re heading into.

Next week, sit back, put your seatbelts on, read the safety manual in front of you and above all, enjoy the ride. Your pilots have the stick and controls firmly in their hands.

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