Author Archives: Pierre Mitchell



About Pierre Mitchell

Pierre leads Spend Matters procurement research activities and has broader solution development responsibilities for intellectual property creation and firm strategy as Managing Director of Azul Partners. This includes spearheading efforts to build new types of interactive and social communities of interest within the procurement profession including overseeing the evolution of spendmattersnet.com, Spend Matters PRO, MetalMiner, and other digital assets within Azul Partner’s umbrella. Pierre has 25 years of procurement and supply chain industry and consulting experience, and is a recognized procurement expert specializing in supply processes, practices, metrics, and enabling tools and services. He is a regular contributor to business publications, a frequent presenter at industry events around the world, and counts himself fortunate to have served and interacted with so many CPOs and future CPOs. Prior to his positions in research and advisory, he led numerous operations and systems transformations at Fortune 500 organizations. Industry positions include manufacturing project manager at The Timberland Company, materials manager at Krupp Companies and engineer at EG&G Torque Systems. He holds an engineering degree from Southern Methodist University and an MBA from the University of Chicago. In the early 2000's, Pierre was the first supply chain practitioner to become a procurement "industry analyst" as the VP of supply management research at AMR Research (now part of the Gartner Group) where he provided trusted counsel to procurement executives, business leadership, IT, and the solution providers who serve them. Most recently, he was the head of procurement research and adjunct business advisor at The Hackett Group, where he helped expand Hackett's procurement benchmarks and research studies while growing the Procurement Executive Advisory Program into a gold standard membership-based procurement advisory service in the market today.


Wait a minute, is Pete Buttigieg a former procurement consultant?!?

This week, Democratic presidential candidate Pete Buttigieg, the mayor of South Bend, Indiana, disclosed client details from his previous job as a management consultant at McKinsey (the firm obtained permission from these clients to release "Mayor Pete" from his NDAs). One of those clients was insurance provider Blue Cross Blue Shield of Michigan. The 2007 job looked to be an overhead cost reduction project, but with a seeming procurement angle to it. The Buttigieg campaign released a statement that said of Buttigieg: “He was assigned to a team that looked at overhead expenditures such as rent, utilities and company travel. The project he was assigned to did not involve policies, premiums or benefits.”

Looking at these three spend areas, the majority of this spending is disbursed to suppliers, so it's likely not a headcount reduction effort, and more than likely focused within a procurement work stream. Attacking rent and utilities are not necessarily the easiest categories to go after as they are often being bound up in larger facilities, real estate and energy management spend, but the travel category is a little more straightforward of an area for a procurement consultant to cut his/her teeth on.

Regardless, should we care about this? Do we want a presidential candidate who understands procurement and cost discipline?

We have some hard questions about (and a soft spot for) Coupa’s new Business Spend Index (BSI)

Coupa recently released its Q4 Business Spend Index (BSI). Indexes such as ISM’s PMI and NMI can be helpful tools for procurement — not to mention economists, investors and policymakers — to gauge overall economic trends as well as underlying supply, demand and inventory conditions.

Coupa is a relative newcomer to publishing an index, but it offers a potentially promising approach based on underlying transactional data flowing through the Coupa system — as opposed to the polling data that is used for the ISM indexes, for example — to complement other economic indicators.

Still, we recommend that firms not read too much into the BSI for making procurement, economic or investment decisions without some additional details.

There are a few issues we’d like to see addressed if Coupa truly wants to make this a useful planning tool and not just a marketing vehicle for its community intelligence strategy:

From Contract Lifecycles to Commercial Value (Part 1): Setting the Table for Digital Transformation (especially for procurement)

Are you looking to find that perfect business area for digital transformation this holiday season?

Well, look no further than contract management.

We know what you’re thinking: Improve the efficiency of processing legal documents? That doesn’t sound very festive, or even high impact! However, contract lifecycle management (CLM) itself is being transformed toward a more strategic and business-focused commercial approach that puts revamped contract information (which itself is being transformed to contract intelligence/knowledge through AI) at the commercial core of nearly all business processes. And yes, blockchain is obviously very relevant here too, but that’s a story for another day.

At Spend Matters, we use the term “commercial value management (CVM)” to denote this type of “CLM on steroids.” The word “contracts” (legal documents) is purposefully replaced with the term “commercial” (commerce / business) and “lifecycle” (of the contract) is replaced with “value” to denote the maximization and protection of monetary value embedded within all process lifecycles (e.g., source-to-pay, order-to-cash/configure-price-quote, plan-to-report, forecast-to-fulfill).

So, this area has a little something for all departments across a business to see and manage: spend (procurement), financial assets/liabilities (finance), legal obligations (legal department), service/asset management (IT), revenues (sales/marketing/CEO), risk/compliance (GRC), service-levels (supply chain/ops), vendors/suppliers (procurement, VMOs, etc.), SOW-based services (including contingent workforce), and all-of-the-above (global business services).

Most importantly, it’s an area that you can actually start small and increasingly collaborate cross functionally and generate hard-dollar financial value (although there’s still plenty of organizational land mines here). It’s also an area where artificial intelligence is being developed and implemented aggressively because of the money that is at stake and because of how broken the current processes and systems are.

In this Spend Matters PRO analysis, we will discuss:

* Priorities of more than 450 CPOs where CLM/CVM has direct relevance
* Why CLM/CVM is a critical competency for procurement professionals to master within source-to-pay (S2P) for planning your work strategically, doing better deals, eliminating value leakage, managing suppliers, etc. It also works hand-in-glove with sourcing, category management, and supplier management (relationship management, performance management, risk management, and information management)!
* Why CLM/CVM is also a critical influence tool to better engage stakeholders who are both spend owners and functional partners with a vested interest here. In later posts, we will share some stakeholder/category specific playbooks that you can use.

In subsequent Spend Matters PRO articles, we also will provide a detailed capability maturity model (and supporting digital capabilities/functionality of leading solutions) that practitioners can use to help plan their capability development, and, yes, their digital transformation.

OK, let’s dive in …

Workday and Scout RFP: Customer Recommendations

This Spend Matters PRO research brief provides analysis in support of Workday and Scout RFP customers following last week’s news that Workday is acquiring the sourcing provider. Previous coverage of the transaction with content aimed at CEOs, strategy / corporate development leaders and investors can be found on Spend Matters Nexus (see Part 1, Part 2, Part 3 and Part 4).

Nexus coverage provides an overview of the transaction, an introduction to Scout RFP, Scout RFP strengths / weaknesses, competitive analysis and recommendations (for ERP providers, suite providers and best-of-breed providers, separately) and potential Workday and Scout RFP integration touchpoints.

Today on Spend Matters PRO, we turn our attention to those which will be most impacted by the announcement: Scout RFP and Workday customers. We encourage Spend Matters PRO practitioner clients who are using or considering Scout RFP or Workday for procurement to contact us for more information on how the acquisition could affect them.

Not all ‘digital’ transformation is the same: 6 degrees of difficulty

Buzzwords abound out there, and a lot of common words are used by folks without necessarily having a common understanding of the meaning. For example, take the phrase “digital procurement transformation.” Even the individual words themselves alone can have different interpretations:

* Digital — Does this mean digitization of procurement processes through workflow automation, or is it something broader?
* Procurement — Is this all of source-to-pay or just procure-to-pay? Or just everything that a procurement department does, including broader supply chain efforts?
* Transformation — Can this just be incremental, continuous improvement, or does it have to be a more discontinuous transformation program?

The problem for practitioners is how to cut through the clutter of this terminology and more easily learn from others surrounding adoption of “digital” in different ways. For example, there is certainly a lot to learn just in terms of better implementation of systems for automating good old-fashioned sourcing, requisitioning, ordering, receiving and paying.

But, there are also higher order digital capabilities that go beyond just automating the proverbial cow path. For example, advanced analytics such as bid optimization can enable new sets of sourcing processes that were not really feasible before. Similarly, techniques such as community-based procurement that use technology across firms can create new value beyond automating within a single firm.

There is actually a spectrum of digital related competencies from basic source-to-pay workflow automation all the way through to procurement-enabled disruptive value chain initiatives. So, if you have mastered some of these basic capabilities for digital transformation and procurement, it is time to raise the “degree of difficulty” and see how others are faring in terms of picking the higher hanging fruit.

In this Spend Matters PRO analysis, we will outline six levels of digital procurement sophistication, and also see how more than 400 organizations stack up based on the latest research.

Oracle Procurement Cloud Update — The Sleeping Giant is Waking Up

Spend Matters attended Oracle’s recent OpenWorld conference to see the latest developments in its cloud ecosystem, especially within Oracle Procurement. Oracle continues to make progress in its strategy of transforming from a technology and products company to one of cloud services. It was a decision that has taken time to develop, but without a doubt this vision is beginning to crystallize as a unified solution within the Oracle Cloud (aka Oracle Fusion) technology platform.

In this Spend Matters PRO article, we will discuss:

* Oracle’s overall cloud strategy and its relevance to procurement
* Latest Oracle procurement product updates and plans
* Analysis of Oracle’s methodical progress in a dynamic market, and what it can teach SAP Ariba (and vice versa)
* Opportunities and emerging progress in platforms and “business networks”

Application-wise, Oracle is a slow and steady provider of cloud-based procurement applications, with a strength in P2P (as evidenced in its performance in our most current P2P SolutionMap ranking). And it’s making progress in its strategic procurement application areas — especially in contract management, where its solution is surprisingly strong relative to non-best-of-breed CLM players. But the game in the market is shifting beyond applications toward open platforms and ecosystems.

Can Oracle seize the opportunity? We’ll discuss...

Zycus update: Basics, BOTs and Beyond (Part 2: AI, MERLIN Roadmap and Summary)

Artificial intelligence capabilities are central to Zycus’ product roadmap. This Spend Matters PRO brief provides an overview of MERLIN (Zycus’ AI underpinnings and platform) and how it ties to Zycus’ overall product strategy and release schedule. MERLIN's main concept is based on autonomous procurement (the tailored bots that it builds are called BOTs), with a focus on automating all the routine, repetitive tasks of purchasing processes, especially transactional and manual ones. For an overview of the company and a product update, read Part 1.

Zycus update: Basics, BOTs and Beyond (Part 1: Company and Product Update)

digital

A Spend Matters team attended the Zycus summit this summer in Utah that provided a deep dive into the firm’s latest developments and gave us a chance to talk to some customers. This two-part Spend Matters PRO briefing will highlight the results of that day, focusing on updates to Zycus’ business, product development and, most specifically, its innovation related to autonomous computing — particularly with its unique approach to bots that combines RPA, AI and a democratized platform approach. It could be a game-changer in the industry, but it’s also not very easy to execute. We’ll weigh in on both sides of this coin.

Part 2 will provide an overview of MERLIN (Zycus’ AI underpinnings and platform) and how it ties to Zycus’ overall product strategy and release schedule. MERLIN’s main concept is based on autonomous procurement (the tailored bots that it builds are called BOTs), with a focus on automating all the routine, repetitive tasks of purchasing processes, especially transactional and manual ones.

20 Questions On Supplier Network Selection (Part 1)

Editor's note: This Spend Matters Plus brief is a refresh of our 2013 series on supplier network selection, which originally ran on Spend Matters PRO. 

The supplier network and business connectivity landscape has evolved into a world where simply staying on top of all of the on-ramps to systems and commerce is challenging enough — let alone selecting and implementing actual networks and having them to talk to buy-side systems and each other. We’ve come up with roughly 20 questions that customers should consider as early as possible when developing a business case and selection approach to the different tools that are available.

Community-based Procurement — Get a Buy with Some Help from Your Friends (Part 2)

In Part 1 of this Spend Matters PRO series, the topic of community-based procurement focused on some examples of communities of interest within practitioner organizations (e.g., category communities and cross-supplier quality communities) and provider organizations such as group purchasing organizations (GPOs). In this second installment, the focus will shift to the following:

* Community of Interest around procurement transformation — and how to use the community (and tools and services) to accelerate that transformation
* The role of automated community-based benchmarking and capability assessments
* Using the community to drive new forms of collective intelligence baked explicitly into a solution’s delivery model and even the solution itself
* Some insight from our SolutionMap database on our requirement titled “community knowledge and collective intelligence”
* A final example on community-based sourcing with Coupa’s new “Source Together” offering — which tears some “market making” pages out of the old Ariba/Freemarkets playbook and then even rewrites that book itself

GEP: Vendor Snapshot (Part 7) — Competitive Landscape

This final installment of our seven-part Spend Matters PRO series on GEP will look at how it compares to its competitors, like SAP Ariba, Coupa, Ivalua, Jaggaer, Corcentric’s Determine, SynerTrade, Wax Digital and Zycus.

Previous installments provided an in-depth look at GEP as a company (Part 1), its specific solutions (Part 2 and Part 3), and a detailed analysis of solution strengths (Part 4) and weaknesses (Part 5). A SWOT analysis and commentary followed in Part 6.

GEP competes in several market segments and brings varying degrees of capability, differentiation and strength in many areas. In certain segments of the market, it is more successful in positioning an overall suite value proposition rather than individual modules (individually or together) for several reasons. Clearly, GEP “keeps coming back to suite” as its technology mantra for good reason.

For example, Spend Matters’ analysis suggests GEP is stronger within the strategic sourcing services and solution areas than in the P2P components of its suite from an “absolute” functional capability perspective. Yet the provider is effective at selling both areas together when they are equally valued. GEP has indeed won some large-scale P2P customers, replacing other solutions, based on the integrated suite value proposition.

Or consider how GEP’s e-invoicing and e-payment capabilities are part of its integrated source-to-pay (S2P) suite solution but are not yet on par with specialist solutions. As another example, GEP has a strong analytics offering but typically positions it within the context of its suite, so while it could compete against specialists in this area, given its classification capabilities, it typically does not.

In this PRO analysis, we’ll set up our coverage primarily relative to technology application segments such as:
* Fully Integrated (and some “loosely coupled”) Source-to-Pay Suites
* Full P2P Suites
* End-to-End and best-of-breed strategic procurement technology (SPT) offerings
* e-invoicing and e-payment specialists
* Supplier and master data management (MDM) providers

But, we’ll also touch on major consultancies, BPO players and niche MSPs.

GEP: Vendor Snapshot (Part 6) — SWOT and Commentary

Global Risk Management Solutions (GRMS)

For those procurement organizations that have not looked at GEP’s technology suite in recent years, they will likely be surprised when exploring its breadth of functionality, as well as the nuances associated with capabilities that differentiate it from other suites. These areas include clever takes on category management, integrated suite analytics, mobile support, and a platform-as-a-service (PaaS) and cloud-native solution built and hosted on the Microsoft Azure platform.

This sixth installment of the seven-part Spend Matters Vendor Snapshot covering GEP provides an objective SWOT analysis of the company and offers our commentary on its platform. In our next installment, we will close out with a competitive market analysis, with recommended shortlist candidates as alternative vendors to GEP, and some recommendations and provider selection guidance for companies that may consider GEP’s suite or even individual modules and capabilities. Previous installments provided an in-depth look at GEP as a company (Part 1), its specific solutions (Part 2 and Part 3), and a detailed analysis of solution strengths (Part 4) and weaknesses (Part 5).