You Ask, We Answer: Procurement’s Burning Questions From the First Half of 2018

We kicked off Ask Spend Matters last July, and throughout the course of this past year, our readers — you! — have sent us dozens upon dozens of fascinating questions on topics ranging from big data to tail spend to group purchasing organizations to services procurement. Answering your questions has been both illuminating and fun, and we only hope that you have learned as much as we have.

Today, we look back at the Ask Spend Matters articles that we published in the first half of this year. You asked about professional development needs, spend management vs. e-procurement, high-volume, low-dollar spend and more — and we answered.

What’s the Price (Again)?

A North America-based reader from a professional services company wrote us wondering why it is that procurement organizations in the public sector tend to ask for prices in the RFI process and then again in the formal RFQ process, whereas private sector organizations typically save requests for the RFQ. Are there advantages to this approach? Should you be asking for prices in the supplier prequalification process?

“It all depends on the government acquisition process,” says Xavier Olivera, lead P2P analyst at Spend Matters. Whether to ask for prices in the RFI process depends on numerous factors, such as how many RFIs you expect to receive, how strict your budget is and how easy you want to make it for suppliers to participate in the RFI.

Professional Development in Procurement

One of our readers wrote us seeking professional development advice: What are the most pressing professional development needs for sourcing and procurement professionals today and for the next five years? This topic is critical for procurement professionals who want to keep up with the sector’s evolving demands, and hardly anyone is better equipped to answer the question than our friends at MRA Global Sourcing, a supply management recruitment firm.

“With shifting market conditions, technological advancement and other factors, the procurement function is changing rapidly. If supply management professionals and their companies don’t keep pace, they’ll be at a serious disadvantage,” MRA writes. Read more about it here.

Time is Money

We all want to have more time for value-add activities, and one of the Ask Spend Matters questions we received this year was precisely regarding this. What are some ways to control high-volume, low-dollar PO spend on readily available commodity items in order to free up time for value-add activity?

We recommend that you read the original article if you haven’t done so, but here’s a quick summary: There are essentially two options. You can use automation to streamline the PO process, or you can decrease or eliminate POs altogether. Spend Matters analyst Pierre Mitchell points out that POs do not make sense for all types of spend. Take recurring utilities payments, for instance. And Spend Matters founder Jason Busch argues that PO can be “a crutch for poor contract management processes and programs in the first place.”

ASM Goes Philosophical

The most recent Ask Spend Matters question we answered gave us a chance to be philosophize a little. A reader asked: What is the difference — philosophically — between spend management software and e-procurement software?

One of the Spend Matters analysts said that spend management software encompasses e-procurement. “Spend management could be more of a business strategy or initiative and e-procurement a tool that supports part of the spend management strategy,” said Olivera.

Spend Matters UK/Europe editor Peter Smith argued that both spend management and e-procurement really point to the same thing. “I suppose spend management might encompass aspects of budgeting, [including] travel management, whereas e-procurement tends to be doing the core procurement activity — the sourcing and/or the transactional part,” he said.

Agree? Disagree? Let us know by leaving a comment on the original article, and continue to send us your questions!

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