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.


SirionLabs raises $44 million, signals its arrival at the CLM winners podium

procurement

SirionLabs just announced it has raised $44 million in a Series C round that brings cumulative fundraising to $66 million for the contract lifecycle management firm with 400+ personnel. This is a major funding round and vote of confidence for SirionLabs as it moves into the leading positions top CLM market players, which includes providers such as:

  • Icertis, the current unicorn in the CLM pack. Both Icertis and SirionLabs are based in the U.S. with large development teams in India.
  • DocuSign, the ubiquitous e-signature vendor that has moved up the value stack by acquiring sell-side-centric CLM player SpringCM and also acquiring AI-pioneer Seal Software (a very smart move).
  • Apttus, now owned by Thoma Bravo, just announced its acquisition of Conga to help it penetrate the huge Conga customer base (another smart move albeit with some CLM application overlap in the portfolio).
  • Agiloft, an innovative CLM and services management application provider built upon a no-code platform that brings usable RPA and AI “in a box” alongside the apps.

We’ve been covering SirionLabs (and all of these players) for a long time. In its six-year history SirionLabs started out as a niche tool for managing strategic third-party relationships (and the contracts that sit underneath). It’s the detailed modeling of those complex services contracts that SirionLabs has mastered. You can see this in the webinar that we participated in with Unilever where Unilever has used SirionLabs to handle complex services contracts with literally tens of thousands of contractual measurements.

It’s this ability to model complex service levels and obligations (and the associated risks, opportunities and downstream “value leakage”) with a best practices knowledge base that is embedded into its system content and analytics (much of it with robust native machine-learning capabilities). This is why we’ve counseled SirionLabs to go all guns blazing into CLM, because in an everything-as-a-service (XaaS) world that is increasingly digitized, externalized and complex, the contract gets elevated from a one-size-fits all risk transference document owned by the legal department to an ultimate commercial system of record for business value — especially in B2B (this is also far more than a siloed sell-side CPQ systems that configure customer-facing proposals/quotes).

We call this new prospect for contracts and business value “Commercial Value Management” and it’s an underlying competency that underpins all enterprise business applications that manage processes or services that deliver business value — hopefully all of them!

SirionLabs has attained “Value Leader” status in our CLM SolutionMap for a while, with good reason: It has leading solution capabilities and it gets good marks from its customers. Some of the other industry analyst firms are only now starting to wake up to SirionLab’s capabilities. Our SolutionMap has hundreds of requirements in it and reflects our deep assessment and also pure voice-of-the-customer assessments, which is a differentiated methodology relative to the “magic wave scape matrices” out there. In fact, we’re in the midst of evaluating SirionLabs right now for our upcoming Fall 2020 SolutionMap release, and they’ve made huge strides in usability and AI, while furthering the embedding of deep knowledge and best practices into the platform.

So, how will the CLM battle play out with some of the players above? And what does this mean from an M&A and investment perspective? We’ll address this now in the rest of this Spend Matters PRO brief, and we offer some related PRO articles below.

Procurement KPIs: The ‘Keys’ that Unlock the Value of Spend and Supply Management (Part 3)

In the first two parts of this KPI series, we highlighted some of the foundational measurements for procurement pros and the problems of traditional procurement key performance indicators in terms of how they can be incomplete, misleading and even damaging to a value chain transformation. In fact, one of the easiest ways to assess an organization’s buy-side sophistication is to review its portfolio of metrics. If all you see is a myopic focus on low operating expense and a high focus on year-on-year cost savings, then you know the organization isn’t taking a holistic approach that maximizes enterprise value.

So how do you get from tactical procurement metrics to more powerful spend/supply measures that help build new capabilities and favorably impact critical business outcomes?

In the previous installment of this series, we mentioned some of the more expansive sets of metrics that organizations use to measure:

  • Spend/cost management and savings
  • Supplier/supply performance
  • S2P process metrics for process performance (e.g., labor efficiency, cycle time, error rates, etc.)
  • Underlying capabilities in talent management, digital, etc.
  • Stakeholder-specific metrics related to their spend, their business objectives, their view into supply/supplier performance, and their assessment of procurement value add

In this final installment, we’ll dive a little deeper into the metrics (and cover 18 of the most important ones), but also use the metrics as a way to align various processes and stakeholders to accelerate a transformation. As part of this, we’ll provide a little more precision to the management concepts below so that they can be aligned and accelerated:

  1.  Value Management (and Performance Management)
  2.  Financial / Budget Management
  3.  Demand Management
  4.  Cost Management
  5.  Savings Management
  6.  Service Management
  7.  Stakeholder Management
  8.  Spend Management
  9.  Supply Management
  10.  Process Management (e.g., S2P management)
  11.  Procurement Management
  12.  Category Management
  13.  Sourcing Management
  14.  Supplier Management (or “Third Party Management” more broadly)
  15.  Contract Management and “Commercial Value Management”
  16.  Performance Management
  17.  Capability Management
  18.  Transformation Management

Finally, we’ll share a graphical performance management framework that will bring these concepts together and help you improve your performance management capabilities so that you stay aligned and focused on what’s truly important across the value chain.

OK, let’s get to it!

The Coronavirus Response survey — In the procurement trenches with ISG/SpendHQ

We’ve asked organizations of all stripes to contribute to our Coronavirus Response series, which highlights solutions that can help in a crisis. (See the intro piece here for an overview). The responses from providers have been extremely diverse (and we’re still accepting input via our survey.)

But the response from the procurement consultancy Insight Sourcing Group (ISG) that we received is so thorough and thoughtful that I’ve decided to simply publish it in its entirety in the Q&A style format that we used.

CORONAVIRUS RESPONSE: Contract Analytics — Finding and Managing Contractual Risk and Reward in a Pandemic

In the Spend Matters Coronavirus Response series, we are exploring the COVID-19 related business scenarios where the pandemic is affecting supply chains and commercial relationships — and how various countermeasures, solutions and providers are helping to respond. Much of the pandemic coverage started upstream in China where the outbreak originated. Last month, an ISM report that was conducted in late February cited that 62% of firms saw delays in orders from China (and a majority of firms also cited delays in simply getting supply chain information out of China). We did a deep dive into supply risk as the first topic of our now seven-topic series covering the pandemic response in areas such as:

  1. Supply risk management solutions that include supply chain risk, CSR risk, supplier financial risk, etc. (Read this category’s PRO analysis and solution recommendations here.)
  2. Sourcing and commodity management, including advanced sourcing, direct sourcing, automated supplier discovery, and commodity management to help dynamically plan and source. (See this category’s recommended solutions for direct sourcing here.)
  3. Advanced procurement analytics to enable direct procurement and/or to perform “spend planning” when demand drops out or spikes. (Its profile for this series is here.)
  4. Procure to Pay (P2P) that emphasizes working capital, dynamic discounting, payment control and related finance priorities to help inject cash into the P2P process — especially for many cash-starved suppliers. (This category is discussed in-depth here.)
  5. Fraud, P2P and vendor management safeguards when new suppliers need to be set up quickly, and also when lowlife fraudsters try to use the pandemic as a way to steal money and IP. (Its profile for this series is here.)
  6. Providers with deep contract analytics that can analyze a contract portfolio for affected contracts from suppliers (and customers) for not just force majeure clauses, but other related clauses that tie to the multiple risks popping up at once in the pandemic.
  7. Contingent Workforce and Services solutions that are able to, at a minimum, help rapidly ramp up on-demand workers to deal with massive resource shortfalls. We are looking at four categories of solutions: for sourcing remote/online work; solutions for sourcing and managing mobile-first contract workers anywhere you need them; solutions to “direct source” and manage contract workers; and solutions for data management and analytics.

This installment of the series covers contract analytics, No. 6 above, and deals with the topic of contracts (and commercial relationships more broadly). Staying on the China theme for now, the pandemic’s impact on Chinese supply chains led to roughly 6,000 force majeure certificates being issued by the PRC via its trade body to Chinese suppliers (a nearly 5x increase since early February). A force majeure clause provides relief from contractual obligations due to external events that are unpredictable/unforeseeable, unpreventable and of no fault of your commercial counterpart — and these certificates are somewhat of a “get out of jail for free” card for contracts.

The supply risk management firm Riskmethods cited that it has seen a 44% increase in firms that declared force majeure and a corresponding 38% increase in production stoppages or reductions in operating hours. It’s the latter metric that should be unpacked a bit. Force majeure is just a single clause, but it’s an interesting one because, similar to a business continuity clause, it represents how trading partners can help model and manage the effects of external risk/complexity on the commercial relationship. For example, Kira Systems, a contract analytics provider, recently conducted a study of two years’ worth of such Chinese supply agreements and found that within their sample of 130:

  • Only 74% even had force majeure clauses!
  • Of those contracts, 89% had contract language specifying the impacts/effects on the commercial relationship.
  • Within those, 42% specified contract termination effects, but 55% specified contract suspension (e.g., suspending performance obligations through some period of time) and 39% discussion/consultation to remedy the situation.

The whole point of this discussion on force majeure is to illustrate that contracts shouldn’t just be boilerplate text documents that include generic clauses that sadly try to properly transfer commercial risk to counterparties, but yet, end up creating downstream confusion and ill will because they don’t actually provide the needed risk mitigation and recovery when the crap really hits the fan like the coronavirus pandemic. The best contracts work in concert with robust risk management processes, policies and playbooks so that when various external conditions change, the underlying contracts can translate those changes to the affected parties and actually give them the decision-support / options to help jointly mitigate them (a business continuity clause is just one example here).

And herein lies the foundational problem: If you do not have an electronic contract repository that is filled with “intelligent” contracts that model the richness/complexity of the value exchange between the parties in commercial relationships in a risky world, you’ll be driving blind and putting yourself at risk. It’s like playing football without a playbook and not knowing what plays to call and how to actually successfully run the plays — NOT a recipe for success! We’ll return to this concept of playbooks later when we discuss Seal Software. Seal delivers many of its world-class contract analytics through a playbook approach where specific playbooks (i.e., the sequence of granular analytics to run that answer specific questions and support specific business use cases) and “rule books” (i.e., rule libraries and knowledge bases that are built on top of a rich contract data/metadata model) are served up as “Insight Packs” that can then be tailored by the client and augmented with Seal experts.

The foundational problem of poor commercial intelligence from an online contract repository takes many forms. IACCM benchmarks estimate that between roughly a quarter and a third of firms struggle to 1) find contracts they’re looking for, 2) find specific information with particular clauses, and 3) assess/report risk in their contract portfolios. So, when you consider the impact of COVID-19 on your customers, suppliers and employees, you can see how pervasive the pandemic’s impact is on contracts related not just to force majeure (and related clauses for termination, governing law, jurisdiction, arbitration, etc.), but also provisions related to delivery performance/service levels, liquidated damages, payment terms, limitation of liability and others.

We’ll dive more into the above clauses later when we get into specific use cases, but for now, CLM providers or niche contract analytics providers should be able to analyze contracts and related broader commercial information (which we call commercial value management, CVM) that in turn allow firms to:

  • Interrogate the contract portfolio proactively based on advanced search down to the clause level and even to the provisional language that includes specific obligations and risks (that hopefully have already been specifically modeled and extracted into granular metadata fields).
  • Perform where-used analysis and “related contracts” pegging to find impacts and enable changes (some of them being mass changes).
  • Identify what contracts have specific clauses in place (or not), including where either you or your counterparties can claim force majeure, but also the related information that determines the related clauses for notifications, required information for proof of harm, proof of mitigation (which might be specified in a business continuity clause), and types of available remedies/resolutions (contract suspension, cancellation, amendment, etc.).
  • Relate contracts to other critical data about counterparties (suppliers, customer, etc.) and value chains to help prioritize where to focus based on certain clauses. For example, customers might be actively trying to cancel/renegotiate their contracts that in turn may link to specific suppliers that you’ll need to pass on the pain. Some CLM systems allow this type of supplier-customer contract linkage.
  • Get ahead of contracts that will do you harm in terms of performance obligations and renewals (and related steps), but also use the pandemic as a good way to re-prioritize sourcing/negotiations efforts and also third-party/supplier risk management activities (e.g., liability issues for essential contractors that still are needed on site in operations)
  • Respond to specific adverse contract events that are occurring in real time (e.g., attempted contract cancellations) while also trying to support new deals and support transformation activities.
  • Support transformation activities during the downturn so that you can address highlighted weaknesses in your contract portfolio (e.g., weak/generic force majeure clauses that don’t specify pandemics or other related clause information).

We’ll dive more into the above clauses later when we get into specific use cases, but for now, such analytics help organizations answer the following questions related to some high-level use cases:

  • How can my contracts guide me in my need to radically cut costs, and more importantly, preserve cash?
  • How can I work with suppliers (or any supply chain partners) to accelerate existing cash-to-cash cycles and reduce working capital levels?
  • How can I support supply chain risk analytics to better support rapid decisions and risk mitigations?
  • Are “wet ink” paper contracts still being used, and isn’t it silly to continue using them given that COVID-19 can be spread through human-based contact or via intermediate surfaces (like a signing pen)? The chances might be infinitesimal, but there’s no better time to finally be moving to a fully virtual contract lifecycle and to get all paper contracts digitized into a proper contract repository. And where are contracting bottlenecks for customer contracts, supplier contracts, contingent workforce contracts and others holding up the value chain when every second counts and every precious resource counts even more than usual.
  • How standardized are our contract terms that are being lit up during the current pandemic, and can we use the crisis to help improve this standardization? Also, how richly are the contracts being modeled so that they can be directly interrogated for such decision support questions? And can these contract risk factors be the perfect way to align and operationalize other risk management processes and systems across the business? Hint: The answer is yes! And as a shameless plug, Spend Matters compares CLM solutions in our SolutionMap benchmarking process/database based not just on process-specific functionality, but also on the richness of the contract information models and underlying technical platform elements.

We’ll drill down into the high-level questions and examples in a moment, but for now, it should be clear that having a modern CLM system (and a commercial knowledge management database built within that system) with robust contract information modeling and associated contract analytics is a critical business competency to manage commercial value (i.e., the “CVM” concept again). But you don’t have to be on the leading edge of AI-based contract analytics to get many benefits from a CLM application, although having a CLM solution with some of these capabilities is a key advantage. These include providers such as DocuSign (with its pending acquisition of Seal Software), Conga Solutions, Agiloft, SirionLabs, Coupa (via its acquisition of Exari), and Apttus.

Some providers have built out specific COVID-19 capabilities.

For example, Seal Software brings its capabilities to bear with existing clients. SirionLabs has built a COVID-19 specific dashboard that has some straightforward analytics, shown below. SirionLabs also specializes in supporting “agile contracts” for large-scale services contracts like BPO deals so that if demand for services spikes or drops precipitously, the contracts can be updated dynamically to accommodate those shifts.

(Click to enlarge image)

CLM market leader Icertis shared some examples of clients using its solutions in interesting ways to address the crisis:

  • One well-known US-based multinational consumer electronics retailer has had its in store performance hit hard by the pandemic and has used the Icertis ICM application to digitize and radically speed up its supplier rebates process with electronics manufacturers — thus helping improve cash flow.
  • Another client is a food supplier/distributor that has been hit hard in its restaurant segment and has used the ICM solution for guided contracting in a mobile app that helps configure the sales contract based on various customer attributes, including payment terms calibrated to the financial status of the customer.
  • A life sciences firm had one of its coronavirus-affected regions move legacy contracts onto the ICM application so that workers didn’t have to physically go find contracts in the office buildings!
  • This move to a virtual CLM environment was cited by Granite Construction, a $3 billion firm headquartered in California, where a procurement staffer mentioned that “many back-office departments, including legal, had to transition to working from home. Since all of our contracts and contracting processes were cloud-based ... there has been little to no change for our business.” “Contracting had always been important, but now it’s more critical than ever. When the outbreak hit, we knew risk indemnities and force majeure clauses were already in our templates and our contracts; we didn’t have to think about it.”

These examples illustrate that contract management has a place in the coronavirus response, even if the use cases are very straightforward and don’t require advanced capabilities such as AI-based analytics.

It’s also important to realize that these commercial/contract issues are impacting an ecosystem of solutions / services providers beyond CLM tech providers. For example, NPI Financial is a market leading IT-intelligence provider and they offered up some insights on what they’re seeing around this topic in the IT/digital markets:

“Some buyers in hard-hit industries are defining plans to ask vendors for special concessions. This requires a strong business case and buyer-side compassion. What (if anything) can a buyer offer the vendor in return for concessions? E.g. Longer commitment, faster payment in the future, ability to use their name publicly in an approved case study or ad, etc. One thing we’ve seen across several of our clients is that buyers are approaching this with compassion — one enterprise told its IT sourcing team to “behave ethically and don’t be outrageous” as they push for cost reductions across their IT supplier base. They know some vendors are also hurting and want to be sure they’re financially sound and strong when we come out on the other side of this crisis.”

It’s encouraging to see buyers taking a holistic and humanistic approach that also lets them be a “customer of choice” when critical vendors/suppliers are hard-hit and to use the buyers’ market leverage responsibly to create value with a win-win approach that should pay off down the road with a thankful supplier.

Within the rest of this Spend Matters Coronavirus Response installment, we’ll dive a little deeper into some use cases and supporting tools.

Some providers are offering coronavirus-specific programs and “freemium” commercial offers, and we’ll note those whenever we update this piece. We’ll also start the series with providers that we already have deep knowledge on, but we’ve been seeking information from other providers too.

Through April 2020, a special PRO Expert Survival Pack is available to procurement practitioners only* at up to 50% off — Learn more

Coronavirus response requires integrated Supply Chain Management — not just Spend Management. Here’s what’s needed.

This Spend Matters PRO analysis piece has been posted outside the paywall to share more information about strengthening supply chains during the coronavirus crisis.


Procurement professionals, like any other, are affected by the current coronavirus pandemic. They will face many challenges in their supply chains. For those who operate within industries where physical supply chains are severely disrupted by the pandemic response, they’ve got bigger issues than analyzing their spend, consolidating spend via strategic sourcing and ensuring that P2P systems are efficiently executing against contracts.


Yet, “spend is what you pay” and “supply is what you get” — and right now, we’re not getting what we need to manage the supply chain in this crisis.



Most of the issues stem from the demand side due to social distancing and stay-at-home orders that starve some industries like travel and hospitality while others like healthcare (e.g., shortages of ventilators, protective equipment and diagnostic testing), telecommunications and consumer packaged goods are strained. Supply-side issues like throttled Asian manufacturing capacity still exist, but the current situation is really a broader story about botched federal responses, lack of basic public-private supply chain governance, naked opportunism, weak supply risk management and the inability to manage the complexity of the problem. That involves not only the physical goods supply chain, but also the human/services supply chain, the physical assets supply chain and the financial supply chain (e.g., to inject capital into the threatened suppliers who supply the supply chain).


What the current crisis also has highlighted, however, is a lack of integrated digital capabilities required to manage the scale of this problem.


This post offers ways to bolster supply chains.


For broader procurement issues, read Spend Matters’ Coronavirus Response series. See the introduction to our series, which we’ll continue to update with recommended solutions in the following areas:

  1. Supply risk management solutions that include supply chain risk, CSR risk, supplier financial risk, etc. (Read this category’s PRO analysis and solution recommendations here.)
  2. Sourcing and commodity management, including advanced sourcing, direct sourcing, automated supplier discovery, and commodity management to help dynamically plan and source. (See this category’s recommended solutions for direct sourcing here.)
  3. Advanced procurement analytics to enable direct procurement and/or to perform “spend planning” when demand drops out or spikes. (Its profile for this series is here.)
  4. Procure to Pay (P2P) that emphasizes working capital, dynamic discounting, payment control and related finance priorities to help inject cash into the P2P process — especially for many cash-starved suppliers. (This category is discussed in-depth here.)
  5. Fraud, P2P and vendor management safeguards when new suppliers need to be set up quickly, and also when lowlife fraudsters try to use the pandemic as a way to steal money and IP. (Its profile for this series is here.)
  6. Providers with deep contract analytics from the CLM space and the AI contract analytics area that can analyze a contract portfolio for affected contracts from suppliers (and customers) for not just force majeure clauses, but other related clauses that tie to the multiple risks popping up at once in the pandemic.
  7. Contingent Workforce and Services solutions that are able to, at a minimum, help rapidly ramp up on-demand workers to deal with massive resource shortfalls. We are looking at four categories of solutions: for sourcing remote/online work; solutions for sourcing and managing mobile-first contract workers anywhere you need them; solutions to “direct source” and manage contract workers; and solutions for data management and analytics.

CORONAVIRUS RESPONSE: Supply Risk — Mitigating and Recovering from the Grey Swan of COVID-19

supply risk

The mission of our “Coronavirus Response” series is to examine categories of relevant solutions and example providers that professionals in procurement, finance and supply chain organizations should investigate to reduce coronavirus supply risk.



We’re calling the pandemic a “grey swan” because pandemics are not unknown risks. If you look at the 2019 World Economic Forum Global Risk report, the “risk of infectious disease” came in last on the top 10 list in terms of impact and didn’t make the list in terms of probability. But, it’s on the list, as the report states:

Each month the World Health Organization (WHO) tracks 7,000 new signals of potential outbreaks, generating 300 follow-ups, 30 investigations and 10 full risk assessments. In June 2018 there were — for the first time ever — outbreaks of six of the eight categories of disease in the WHO’s “priority diseases” list. If any had spread widely, it would have had the potential to kill thousands and create major global disruption.


And guess what was included in those eight categories: Middle East respiratory syndrome coronavirus (MERS-CoV) and severe acute respiratory syndrome (SARS).

And if you look at some of the nearest risk types on the risk map, you’ll find:

  • Fiscal crisis
  • Food crisis
  • Unemployment and underemployment
  • Failure of financial mechanism or institution
  • Failure of national governance
  • Critical information infrastructure breakdown

Do these sound familiar? The report also shows how many risks are highly interconnected, and there’s a thread that runs through most of them: supply chains. Supply chain folks’ ears perk up given how often the term “risk” is uttered these days, and unfortunately not in a good light (note the last three risks in the list above). And those supply chains are highly interconnected global flows of goods, humans and machines — and viruses that can jump along for the ride. When the information systems/silos and governing systems/silos fail, that’s when the swan kicks your butt (which is in character for a swan, actually).

When corporations and governments alike don’t learn from the past, then the pain of previous risk events fade, defenses drop, preparedness falters and supply chains lose their protections which is shown well here (courtesy of Resilinc):



(Click image to enlarge)

This situation is why today’s brief focuses on supply risk management, the first of our seven procurement-centric solution categories that we’re covering:

  1. Supply risk management solutions that include supply chain risk, CSR risk, supplier financial risk, etc.
  2. Sourcing and commodity management, including advanced sourcing, direct sourcing, automated supplier discovery, and commodity management to help dynamically plan and source. (See this category’s recommended solutions for direct sourcing here.)
  3. Advanced procurement analytics to enable direct procurement and/or to perform “spend planning” when demand drops out or spikes. (Its profile for this series is here.)
  4. Procure to Pay (P2P) that emphasizes working capital, dynamic discounting, payment control and related finance priorities to help inject cash into the P2P process — especially for many cash-starved suppliers. (This category is discussed in-depth here.)
  5. Fraud, P2P and vendor management safeguards when new suppliers need to be set up quickly, and also when lowlife fraudsters try to use the pandemic as a way to steal money and IP. (Its profile for this series is here.)
  6. Providers with deep contract analytics that can analyze a contract portfolio for affected contracts from suppliers (and customers) for not just force majeure clauses, but other related clauses that tie to the multiple risks popping up at once in the pandemic.
  7. Contingent Workforce and Services solutions that are able to, at a minimum, help rapidly ramp up on-demand workers to deal with massive resource shortfalls. We are looking at four categories of solutions: for sourcing remote/online work; solutions for sourcing and managing mobile-first contract workers anywhere you need them; solutions to “direct source” and manage contract workers; and solutions for data management and analytics.

Broader supply chain issues and solutions are also clearly in play, especially related to inventory visibility, inventory positioning, demand forecasting, capacity planning, logistics planning/execution, distribution/allocations, global trade management, product design, the internet of things (IoT) and so on.

But, even though the initial seven use-case categories and solutions are only addressing a subset of the issues, the ability to respond intelligently in the short term can also help set organizations up for the future as we get back up and running.

In this installment of our Coronavirus Response series, Spend Matters will explore supply risk management, which includes supplier risk management, but also the broader area of supply chain risk management (SCRM) that seeks to keep critical supply lines flowing. In the case of COVID-19, these supply lines include the critical components/materials (and supporting manufacturing and logistics networks) that:

  • get assembled into the ventilators that keep sick patients alive while this viral plague sweeps through
  • are used to manufacture the personal protective equipment (PPE) that critical health care workers need to protect themselves
  • support the pharmaceutical and medical device/supplies supply chains that create the products that diagnose and treat the disease with therapies and vaccines — as soon as possible!
  • build “pop-up” hospitals and everything in them needed to treat patients, who could flood in and overwhelm healthcare workers

Broader supply risk management also includes:

  • Understanding demand-side risk when demand falls off the table when 80% of populations are sheltering in place in the short term. The demand (or lack thereof) also ripples up the supply networks and service networks — especially to smaller suppliers.
  • Considering the supply risk of contingent workers who will be critical “flex capacity” to support the physical supply chains of foods, medicines, equipment, etc. We’re covering this more here and here).
  • Financial risk that occurs when suppliers, especially smaller one with thinner margins, are starved for cash as liquidity slows in a risk-averse market of cash-strapped buyers and cautious financial-services lenders.

Specialized supply risk management solutions and services providers can support the above requirements and help to answer a range of questions, such as:

  • What countries does my company do business in with suppliers at the tier one level? Tier two? Tier three? Which of these should I prioritize as truly critical?
  • Which suppliers are affected by COVID-19 within these regions? How badly are they affected? How can we find out quickly?
  • What are my products and revenues that will be affected? And what should I do about it? Do I have playbooks defined, and if so, how do I execute (and if not, how do I create them when this horror show has died down)?
  • How is my logistics network affected directly by COVID-19 (e.g., port/warehouse slowdowns and strikes) and how is it impacting my freight? What transportation lanes are impacted to see if my freight is impacted? Can delays or other risk factors be expected further down the inbound supply chain before it reaches my facilities? For example, West Coast ports were starving for container ship capacity because so many ships are idled in China in quarantine conditions. Now, as air freight capacity is impacted by massively reduced passenger flight volumes (and respective cargo capacity lying underneath), what are my expedited freight options?
  • Is there anything I can do if suppliers are individually high-risk? Will they be financially threatened because of COVID-19? How can I get visibility into their financial health, especially if they’re privately held?
  • Which of my affected suppliers are potentially unsustainable in their supply risk practices rather than just their traditional CSR practices?

For the supply chain risk management (SCRM) scenarios and questions listed above, we’ll discuss the best-known specialists in the area: Riskmethods and Resilinc. But we’ll also touch on Resilience360, which has unique capabilities within the broader supply network vis a vis the logistics network. Sourcemap also has some supply network visualization and risk modeling/monitoring capabilities, but hasn’t been drawn into the healthcare supply chains like the others (although the CPG supply chain has also been affected — as any toilet paper shopper has discovered!). Elementum doesn’t have its own native SCRM solution (it partners with Resilinc), but it does offer a command center solution that it is now providing as a freemium “virtual war room” offering.

These specialized providers don’t have to be your only choice however. For example, we’ll cover what Sievo (a broader procurement analytics provider with roots in spend analytics) is doing with an evolving “mash-up” solution that provides a view into spending, the supply network, risk overlays, etc. Simfoni similarly has a COVID-19 risk assessment dashboard solution that it is offering for free. We’re not sure how long it’ll allow free usage, but the website page for the offering has a slick little Power BI dashboard that you can interact with that gives a flavor of its capabilities.

In terms of supplier risk management, we will cover this as we expand our coverage to broader supplier management later (and supplier/third-party management is clearly a foundational process to any procurement organization), but the one aspect that we will initiate coverage on now is supplier financial risk management. Although the credit bureaus and traditional supplier risk evaluators / content providers like D&B offer some insights into supplier financial risk that we’ll add to our coverage later, we’ll touch on two providers, Rapid Ratings and Credit Risk Monitor, who can help assess supplier financial health for critical suppliers. LexisNexis offers broader supplier risk management capabilities, but you can check out its free COVID-19 coverage from a legal perspective over at Law360.

As a side note, there are requirements here for performing the sourcing and commodity management activities required to rapidly identify new sources of supply, conducting complex sourcing events for materials, parts and components (which may be tied to broader bills of material), qualifying suppliers based on targeted requirements (e.g., for a specific line), and managing and tracking suppliers based on custom scorecarding. We cover this area (No. 2 of our list above) here, and we also explore the demand-side volatility scenarios/analytics here (No. 3 from the list above).

Let’s jump into how supply risk management can help.

Through April 2020, a special PRO Expert Survival Pack is available to procurement practitioners only* at up to 50% off — Learn more

From ‘Ariba Live’ to SAP Ariba not-so-live: A dispatch in the coronavirus era

SAP Ariba launched the 19th annual version of its Ariba Live event today, but this year was a virtual event since the physical Las Vegas event was canceled due to the COVID-19 pandemic. Las Vegas has plenty of microbes anyway, but not of this sort, and SAP Ariba was obviously right in canceling — like SIG, Basware and many other procurement conferences.

The first Ariba Live session was from Chris Haydon, who is “President of Procurement Solution Area,” which in German SAP speak means that he’s the senior product/strategy executive. Commercial operations have been folded into broader SAP, and there are many coordination/integration touchpoints across the SAP ecosystem too numerous to highlight, but Spend Matters’ PRO subscribers can get into the gory details here.

Transforming from Contract Management to Commercial Value Management (Part 2): Putting Contracts at the Core of Source-to-Pay

supplier network

In the first installment of this series, we discussed how contract management was morphing from a document-centric risk transfer legal vehicle to a broader commercial value management (CVM) competency that helps businesses:

* Perform spend planning rather than spent analysis
* Gain earlier and deeper visibility into financial obligations rather than just using the general ledger
* Operationalizing risk management rather than just one-off (or high-level) efforts
* Integrating upstream strategic sourcing to downstream P2P (of course)
* Explicitly tying sourcing and contracts into supplier management

In this installment, we will dive a little deeper into how next-generation contract management helps facilitate the flow of value (and prevent “value leakage”) within the source-to-pay process, but also the broader swaths of enterprise processes where controlling the contracts means controlling the spend — and how finance and procurement groups can use this to their advantage.

DocuSign buys Seal Software: Why the CLM Market and Digital Platform Market May Never be the Same (Solution Overview and AI Competitive Analysis)

Spend Matters reported last week that DocuSign, which offers its eponymous e-signature product and a CLM solution (formerly SpringCM), had entered a $188 million all-cash agreement to purchase AI and contract analytics specialist Seal Software. The transaction brings Seal’s capabilities for enterprise-wide contract discovery and analysis firmly into the wheelhouse of a growing CLM presence for DocuSign (beyond digital signatures), as well as raises the competitive bar for CLM specialists, suite providers of many forms and even for “digital platforms.”

But what exactly is DocuSign’s current positioning in the CLM market, and what does acquiring Seal Software bring to the provider’s platform — the “DocuSign Agreement Cloud”?

This Spend Matters PRO brief provides an overview of DocuSign’s current set of capabilities and applicability to the buy-side CLM market, as well as a reprise of Seal Software’s core functionality and offerings. It also includes a comparative rundown of where both specialist CLM vendors and S2P suites are in their own AI development journeys, along with our projection for how DocuSign’s CLM strategy will play out in the broader CLM space and potentially as a disruptive offering in the amorphous digital platform market.

To cut to the chase: The CLM market and digital platform market may never be the same.

DocuSign-Seal Software transaction analysis (Part 1): Looking at DocuSign’s CLM assets (DocuSign, SpringCM, Seal)

Spend Matters recently predicted that DocuSign, the electronic signature specialist, would buy the AI-assisted contract analytics firm Seal Software (another reason that subscribers to our PRO research are ahead of the market). As the prediction noted in January, “we can’t help but think that DocuSign will be actively looking for inorganic growth options in 2020, and Seal Software might be an obvious choice given its previous $15 million investment. DocuSign will also likely need to focus its attention to the buy-side to bring some parity to its SpringCM pickup.” And so the prediction came true. Perhaps faster than we might have guessed (although the transaction will not close until later this year).

In the coming weeks, Spend Matters Nexus will publish a series of briefs covering the transaction and what it means from a corporate strategy standpoint for DocuSign in regards to targeting CLM. Our approach will include exploring remaining gaps in buy-side CLM for DocuSign.

But let’s start today by focusing on DocuSign’s inventory of assets and what Seal brings to the table, specifically alongside SpringCM.

We’ll also tackle what Seal’s AI provides to DocuSign, and offer some initial analysis about the fallout for the competitive landscape in this brave new CLM-meets-AI-meets-“platform” world (spanning a range of providers like Icertis, Agiloft, Coupa, SAP Ariba, Conga, LegalSifter, Kira, Luminance, LawGeex, Zycus, etc.). An aside in this regard: Other buy-side providers who used Seal will now be likely looking elsewhere for CLM support for counterparty document shredding, analytics and repository creation (Seal’s partners include PwC, KPMG, E&Y, Deloitte, IBM, Coupa, SAP Ariba and many others).

Let’s dive in.

If you are new to CLM market, we recommend starting with the following research briefs:

* Seal Software: Vendor Snapshot — Part 1: Background and Solution Overview
* Part 2: Product Strengths and Weaknesses
* Part 3: Commentary and Summary Analysis
* For SolutionMap Insider subscribers, see the CLM Scoring Summary that shows where vendors rank and details their capabilities, including both pure play providers (e.g., Icertis, Agiloft, SirionLabs) and the S2P suite vendors. We’ll be adding Conga in our spring SolutionMap release in March — and then add Apttus and hopefully DocuSign (SpringCM) in the fall release. The public can see the SolutionMap CLM vendor rankings by persona here for free.
* Commercial Value Management: Making Contracts the Commercial Core of Enterprise Value (Part 1) [PRO]
* CVM (Part 2): Using Next-Generation Contract Systems to Integrate Operations, Financials, Risk and Technology [PRO]
* CVM (Part 3): Critical Commercial Use Cases to Align Extended CLM with the Enterprise [PRO]
* 2020 Predictions for Contract Management: Where the CLM Market Is Going This Year and This Decade [PRO]
* Free content: 2020 Predicaments in Contract Management: Poor Adoption, CLM Market Fragmentation and Limited Imagination
* Free content: Artificial Intelligence in Contract Management (4-part series)

Procurement Consulting Analysis: A review of The Shelby Group

P2P implementation

The Shelby Group is a U.S.-based specialist source-to-pay solution and technology consultancy (think “spend management,” if you prefer that term) that is best known for its proven expertise in implementing and optimizing Coupa. Located primarily in the Chicago area, the firm serves clients globally, but with an emphasis in North America. Shelby also partners with Ivalua, SAP Ariba, Oracle, Sirion Labs and others.

That said, the Coupa ecosystem is clearly Shelby’s sweet spot, or perhaps “suite spot” is a better term! The firm also has developed some of its own unique digital capabilities that we’ll discuss in this analysis. Shelby has served the market for almost 20 years and has been very happy to “stay in its lane” as a specialist (and has some large well-known consultancies on its customer roster).

This Spend Matters PRO analysis provides background on The Shelby Group, including insights on its customer segments, geographies and emerging digital capabilities. But, primarily, this PRO analysis highlights the voice and experience of Shelby’s clients. We also offer data-driven recommendations and analysis for organizations considering Shelby as a systems implementation and consulting partner.

This report is based on extensive primary research by the Spend Matters team and from our SolutionMap’s customer reference process, where real-life customers share their vendor experiences and help us rank vendors. Spend Matters surveyed a range of Shelby clients in 2019, collecting qualitative and quantitative insights from organizations that had gone through implementations, change management, transformation and related initiatives as part of procurement technology deployments. The Shelby Group also provided facts and figures about its practice directly to Spend Matters, and we’ve added some “color” to the analysis, given that we’ve seen Shelby’s work in the trenches for well over a decade.