Because of the coronavirus crisis, Coupa is the latest solution provider to reschedule its customer event, and new dates in the fall are being confirmed for Inspire North America, which will still be held in Las Vegas, according to Coupa’s website.
Dear Readers,
In recent days, Simfoni has developed a COVID-19 risk assessment dashboard to help its customers assess potential business impact arising from supply chain disruption. Given the acuteness of this situation, we have decided to provide this dashboard on a complimentary basis in the interest of supporting businesses, jobs and maybe even lives.
In this article, I describe the methodology applied in our COVID-19 Risk Assessment so that readers can recreate the analysis and apply it to their own situations. Our assessment follows three stages: Identification, Supply Market Risk Analysis and Mitigation.
In this installment of our “Coronavirus Response” series, Spend Matters will explore sourcing and commodity management, with a focus on direct materials. With COVID-19 impacting logistics and existing supply bases, in China (even though China seems to be recovering), the rest of Asia and Europe (thus far), there will be numerous emerging needs for companies across manufacturing. This PRO brief will focus on the first three solution providers that we’ll profile in this category: Allocation Network, Coupa and Jaggaer.
The mission of this series is to examine categories of relevant solutions and example providers that professionals in procurement, finance and supply chain organizations should investigate to reduce, and even mitigate, coronavirus supply risk. And even if the 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 when sanity returns to the world.
Today’s brief focuses on the second of the seven 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.
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.
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 contract workers at geo-specific capabilities; solutions to “direct source” and manage contract workers; solutions for data management and analytics. (The first PRO brief from this category, about sourcing remote/online work, can be read here.)
Owing to the magnitude of the crisis, Spend Matters recently made the series introduction available for free to all readers. PRO subscribers can see our follow-up pieces that profile the other categories and their solutions in that market. We will include a lot of information on each category PRO brief that readers can see without hitting a paywall, but since we also draw heavily from our existing deep-dive analysis of the providers from our SolutionMap database, some information will be available only to our PRO subscribers.
For sourcing and commodity management, the emerging needs for companies across manufacturing will include rapidly identifying 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.
After the pause button is lifted on production — in cases where one is put into place — these needs will become especially acute during the recovery phase in specific regions (which may be different from the recovery phase in other geographies).
The initial three solutions — from Allocation Network, Coupa and Jaggaer — all have capabilities in advanced sourcing for direct materials and/or strong support for scenario modeling and optimization. We will likely add providers with similar and other strengths in sourcing and commodity management at a later stage.
Each category-specific PRO piece in this series has three sections:
1. Problems and Use Cases. We’ll highlight the problems in force (which will vary through different phases of the crisis) and the various scenarios where solutions can provide deeper insights, intelligence and scalable workflows.
2. Solution Rationale and Value. We’ll outline how various solutions can help solve the problems and the specific questions that they’ll help answer.
3. Example Providers. We’ll highlight the solution providers that can support the problems and deliver value.
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 vendors too.
Let’s jump into how sourcing and commodity management can help.
Spend Matters welcomes this guest post from Coupa CEO and Chairman Rob Bernshteyn, whose letter about procurement’s role in tackling the coronavirus crisis originally appeared on LinkedIn.
It's been a long time coming, and no one wanted it to occur under these circumstances, but procurement is now a primary focus of attention at your company. It’s time to show everyone what you can do. Your company is asking for you and your department to step up like never before, under the tremendous pressure we are all under, and lead. Specifically, you can provide leadership in at least four key areas right now.
Spend Matters today has updated its free SolutionMap benchmark rankings for the new Spring/Q1 2020 release. The latest SolutionMap compares 69 procurement technology providers across 13 categories — which includes a new ranking map for Accounts Payable (AP) Automation vendors.
Six providers are featured in the first AP Automation category, which reflects the growing importance that vendors are placing on payments.
SolutionMap began in 2017 and has become the definitive procurement technology benchmark. It will now be updated in the spring and fall instead of each quarter.
Click on the headline above to find out which vendors are in the new AP Automation category — and to learn about new vendors to SolutionMap.
In our response to the coronavirus outbreak, this Spend Matters PRO series is continuing its mission to examine selected technology providers that professionals in procurement, finance and supply chain organizations should consider to reduce, and even mitigate, coronavirus supply risk — and then recover as fast as possible when sanity returns to the world.
The introduction to this series grouped the technology providers that we will (initially) cover into five specialty areas, with an example vendor for each.
1. Supply risk management (e.g., riskmethods.)
2. Sourcing and commodity management, including advanced sourcing, direct sourcing and commodity management to help dynamically plan and source (e.g., Jaggaer)
3. Advanced procurement analytics to enable direct procurement and/or to perform “spend planning” when demand drops out or spikes (e.g., Sievo)
4. P2P that emphasizes working capital, dynamic discounting, payment control and related finance priorities (e.g., Basware)
5. Fraud, P2P and Vendor Management Safeguards (e.g., APEX Analytix)
Owing to the magnitude of the crisis, we recently made the series introduction available for free, to all readers, to serve as a jumping off point. PRO subscribers can see our initial vendor profile of riskmethods and other profiles in this series. (All readers can get a lot of free information on each PRO brief before the analysis begins behind the paywall.)
Today we continue the series by a deep dive on Sievo, one of the analytics providers we mentioned in our introduction and a unique provider in the spend analytics space. In fact, it was the only provider called out by name by Spend Matters Founder Jason Busch on his recent Nexus piece on the McKinsey's acquisition of Orpheus because of the unique offering and value it brings to the space as one of the last turn-key, pure-play solutions and, now, the only such offering with a mature solution for community-based commodity/direct material insights and deep market intelligence.
If your organization doesn't have an advanced sourcing and procurement analytics platform, it's one of the most fit-for-purpose, off-the-shelf platforms to help your organization analyze its way through the COVID-19 crisis.
How? That's what this article will attempt to answer, double-clicking on one of the best-fit vendors for the job.
Let's dive into our look at Sievo and its ability to help during the coronavirus crisis.
As indicated in Part 1, Suplari was formed to get the relevant purchasing data out of siloed enterprise systems and into the hands of procurement professionals who needed it to make decisions. Billing itself as “AI-Driven Analytics for Modern Procurement Teams,” Suplari was formed with the goal to use all of the available, disparate enterprise data, machine learning and a modern user experience to put the enterprise — and the employee — back in charge when dealing with their suppliers in negotiations.
The co-founders all had over two decades of experience in enterprise software, SaaS/Cloud, and data, so they realized this is no easy feat. Not only did they know that the data was usually dirty, and disparate, but that simply providing one view would result in a deluge that would be more than the average procurement professional could process, and that the professional would be no better off with too much data to try to make sense of in a limited time as they are when they have too little. To solve this problem, they decided they would apply machine learning and AI to identify patterns and simplify the processes of cleansing, classification and connection — the third being the more untapped need — and opportunity — in the procurement space today.
This Spend Matters PRO Vendor Snapshot will explore Suplari's strengths and weaknesses, providing facts and expert analysis to help organizations decide if the vendor is the right one for their shortlist. For an overview of the provider and its platform, see Part 1. In Part 3, we will conclude with an analysis of Suplari’s competitors and offer a final summary.
This three-part Spend Matters Vendor Snapshot series will give an overview of the spend analytics vendor Suplari, examine its strengths and weakness, and provide a comparison with its competitors in the procurement technology market.
Billing itself as “AI-Driven Analytics for Modern Procurement Teams,” Suplari was formed to get the relevant purchasing data out of siloed enterprise systems and into the hands of procurement professionals who needed it to make decisions. However, realizing that the data is usually dirty, disparate and deluging for the average procurement professional, they also aimed to apply machine learning and AI to identify patterns and simplify the processing of cleansing, classification and connection.
In the early days of spend analysis, most of the best-of-breed vendors hitting the market focused on classification and categorization — because that was supposed to be the hard problem and everything else would be easy if you had clean, classified data. But that was just the first obstacle to good spend analysis. The next obstacle was connecting the dots to find the opportunities.
Early vendors purported to solve this problem with some canned top N reports — top N categories, top N suppliers, top N geographies, top N departments, top N off-contract categories, top N off-contract suppliers, etc. This worked well in the early days. A scrupulous sourcing professional would work their way through each and every report until they had evaluated the top 20 or so suppliers, geographies, departments and so on (or until they analyzed the top 80% of spend) and put contracts or procedures in place to capture the bulk of the savings. Six months later they'd run the reports again and then find ... nothing. They'd still be bleeding into the red, but wouldn't be able to do anything about it because most of the bleeding would not be with the top N suppliers, geographies, departments and so on.
Next-generation vendors reported to solve this problem with do-it-yourself reporting where buyers could run reports to target the suppliers, categories, geographies, departments, etc. where they believed problems lied. This was one step up, but the amount of time and effort it typically took to run a report, analyze it for a potential opportunity, determine the opportunity was not worth the effort it would take to capture it, and run another report made it too costly to find and capture all but a few opportunities. As a result, many second-generation solutions ended up being valueless and abandoned not long after their first-generation counterparts.
What was needed was a system that could iterate through all the categories, suppliers, geographies, etc. and find the largest opportunities in each, rank them in order of opportunity size, and present them for easy review by a procurement professional.
And what is really needed is a system that can look at the opportunity size, look at the contracts in place, look at the market pricing, look at historical and community results, and identify not only the opportunities that appear to have the largest size, but the largest opportunities that can be captured now. And while there isn't a system that's here yet, this is where a modern system should be going — and it's where Suplari wants to go.
Ride-hailing charges overtook spending on meals as a proportion of the total T&E budget for the first time, according to the 2019 Year In Review Travel & Expense Management Trends Report from Certify, a spend management company that has insights into expense budgets worldwide.
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.
In our look at how companies do tech selections, some firms cast a wide need to see what the market has to offer and some go hunting for specific business needs.
Versatex, a spend management firm that needed a spend analytics solution, did its tech selection using a rigorous set of requirements and it took five months to find the right vendor, Simfoni, and confirm that it was a good fit, the Cincinnati-based Versatex said.
“Because spend analytics is a rapidly evolving space, if you're not out there teaching yourself something new and staying abreast of what's going on, you're behind,” said Nathan Jenkin, Versatex’s VP of Strategic Sourcing and Spend Analytics.
How are businesses responding to demands for transactional transparency from customers and wider society? Company leaders need a more holistic approach, which means knowing what sits underneath all their transactions. At Basware, we see such Visible Commerce as a way to simplify operations, spend smarter and do more.
We partnered with Harvard Business Review Analytic Services (HBRAS) to take the pulse of business leaders and to understand how automation is empowering strategic decision making at their firms. I am pleased to share the findings of how these elite company executives are using transparency to mitigate risk, create business value and hone their competitive edge.
The report, “Using Transparency to Enhance Reputation and Reduce Business Risk,” explores the full value that such transparency delivers. It provides a lens over the advantages of automating finance and procurement processes. It finds that those working toward the total visibility of the flow of money, goods and services are able to make more effective strategic decisions and that this transparency is a defining characteristic of winning businesses worldwide. Those that have invested in improving visibility across finance and procurement benefit from greater employee engagement, improved reputation and revenue growth.