Author Archives: Spend Matters Brand Studio

For procurement project managers looking to overcome manual processes and engage stakeholders, digitizing your sourcing workflows can be a mammoth task.

It’s more than just using digital files like PDFs, Excel spreadsheets and email. Although they are a step in the right direction, those tools are not true digitization. Digitization is really about making a workflow that’s easier for people to use while saving time and money. It involves putting all the documents in a central, accessible source and making the whole process more collaborative with people across your company and with vendors.

Bonfire, a cloud-based provider of strategic sourcing and contract and performance management, knows your pain because it has already solved those problems.

Remember when you could only book a flight by calling a travel agent? Or do a banking transaction by visiting the nearest branch? Buy insurance only through an agent? Shop for a new house only by reading the local newspaper classifieds, or search for a plumber or doctor only in the Yellow Pages?

The way consumers buy services now has been massively digitized, with the enormous benefits of great selection, convenience and value for all of us. Yet most business-to-business services are bought today in the same way they were bought 20 years ago. That still largely depends on a phone call between a business stakeholder who has a need and someone they trust to broker the work. That someone is often a senior executive in a large firm, who then rallies a team to prepare a proposal that will be presented to the buyer in person.

But change is coming.

Sourcing optimization holds much promise for crunching the vast amount of data that procurement organizations increasingly face — as well as cutting costs, saving time and guiding buyers and suppliers to better decisions. But to date, the tools used for optimization have been too complex for most professionals to easily examine and understand the wide range of sourcing events presented.

That’s starting to change as procurement technology modernizes and customer-experience expectations rise.

To understand how the barriers to using sourcing optimization are dropping and to see the wider adoption of dynamic negotiation and sourcing optimization tools, we asked Scout RFP Co-Founder and President Stan Garber to shed some light on the latest developments.

“Today, we can optimize the entire sourcing process with a click of a button. We’re going from the days of manual Excel modeling and email juggling to a collaborative application that is as simple to use as an iPhone,” Garber said for this Q&A about the future of the procurement and sourcing technology.

Sourcing optimization can and should be applied more broadly to a variety of sourcing scenarios, bringing a simpler approach and guided exploration — designed with the everyday sourcing user in mind. With the value it can bring to categories and customers alike, why should sourcing optimization remain out of reach beyond the most complex logistics bids?

To understand how this situation arose, it helps to consider the rationale behind how first-generation sourcing optimization solutions were designed.

Every growing company reaches a point when transaction volumes overwhelm misapplied IT systems and manual business processes. When that happens and the risks rise, businesses have to begin the necessary task of identifying a better way forward. For many organizations, that means automating and optimizing the sourcing process with dedicated e-sourcing software — ideally a setup that’s easy to use and gives your company a competitive edge.

As a division of the beauty products maker L’Oreal found out, the strategic sourcing platform from Bonfire could resolve many of these issues.

Spend analytics solutions often get passed over when it comes to claims of ROI. But spend analysis can provide just as much value as better-explored options like e-procurement or sourcing systems, sometimes providing ROI immediately after being turned on. Yet quick wins and short-term value are only the starting point.

To help procurement pull its head out of the past and begin to see (and plan for) the future, here are three outside-the-box areas where spend analysis can unlock new sources of long-term value.

As the world of work changes rapidly, so too must managed services providers (MSPs). The “same old” execution of a traditional contingent workforce program that includes VMS technology is no longer cutting it, and MSPs that fail to realize this risk being replaced by new entrants intent on disrupting the old industry model.

In a world of accelerating change, enterprises expect their service providers to be right there with them, successfully navigating those changes. Enterprises cannot compete with an eye on the past — they need value-added solutions that help them to succeed now and into the future. What does this look like? Check out the infographic below to learn how the MSP industry is evolving today and tomorrow.

On Nov. 23, the Trump administration released the findings of the fourth National Climate Assessment, which detailed a dire set of predictions for U.S. businesses over the next several decades.

In addition to the headline statistic projecting that the U.S. economy will shrink 10% by the year 2100 due to effects from climate change, the report, which was compiled by leading climate scientists and 13 federal agencies, warned that numerous facets of global supply chains are at risk for disruption. These include not only common problems from natural disasters such as wildfires and hurricanes but also breakdowns in critical logistics infrastructure, geographic shifts in resource availability and volatility in global trading relationships, to name a few.

The report paints a bleak picture, but it also offers several takeaways that can help businesses get a grip on how to understand the supply chain risks of climate change and begin addressing them. Key among these is the suggestion that material, facility and logistics planning will all need to begin adapting today to effectively tackle climate change-related effects in the near and long terms.

To help you get started, here are the top three areas that procurement and supply chain organizations should examine when assessing the risks that climate change poses to their supply chains, as well as the NCA report’s key recommendations about how to address them today.

As the 2018 Atlantic hurricane season draws to a close at the end of November, it’s a good time to reflect on how one of the most disruptive periods of the year is affecting supply chain risk planning. If there were one lesson for procurement to learn from the past season, it’d be this: Hurricanes are becoming more powerful and lasting longer. The last several years of intense storms (think Harvey, Irma, Maria, Florence and Michael) are not anomalies but what appears to be the new normal. Businesses must therefore take stock of the new standards for natural disasters and prepare accordingly — or risk being caught off-guard.

Managed service providers (MSPs) failing to adapt to evolving enterprise standards for contingent workforce management risk becoming obsolete before the end of the decade. To win and keep business, MSPs of the future have to reposition themselves as experts, becoming trusted advisors offering a consultative approach built on modern contingent workforce strategies. What does this look like in practice? To find out, we take a look at how Geometric Results Inc. (GRI) is tackling the contingent workforce challenges of tomorrow and examining how its solutions and services align with the three characteristics of successfully evolving MSPs.

Most varieties of procurement software deliver some form of return on investment. Whether it’s an e-procurement system that consolidates process costs or a sourcing tool that optimizes supplier selection, successful vendors can always point to clear ways their solutions deliver value, both immediately and in the future. When it comes to spend analytics, however, demonstrating ROI has proven more elusive. This is because dedicated spend analysis tools are often viewed as enablers to saving money through other methods, rather than a benefit in their own right. Yet while it is true that spend analytics deliver value by illuminating new savings opportunities, these tools can also be used to obtain tangible wins in their own right.

Improving working capital performance has become increasingly important to companies in recent years, yet few procurement and finance organizations have found truly sustainable, long-term solutions to support this goal. The problem is that immediate external forces are pushing businesses to make working capital improvements now, while the sound financial strategies to maintain these changes require more than a few “quick fixes” to ultimately succeed.