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Are your spend classification efforts relevant and truly moving the needle?

Last month, we examined the current constraints on procurement today and discovered that data spend quality is an issue that’s holding organizations back. Digging in further, we found that spend classification is a big factor affecting organizations’ abilities to get high-quality data. The reality is you don’t know what you’re actually spending in each category. For many procurement teams, getting the insights they need is challenging because classification is painful and time-consuming, and they don’t know how to make things better.

Let’s take a deeper dive into some of the problems with spend classification today:

Workforce Logiq’s acquisition of ENGAGE Talent: On the innovation path beyond MSP [PRO]

In October, Spend Matters reported on Workforce Logiq’s acquisition of the workforce data and analytics firm ENGAGE Talent. The acquisition of ENGAGE capped a big year for a company that, under the leadership of staffing industry outsider Jim Burke, has been innovating beyond the boundaries of the traditional — some would say commoditized — MSP model.

This Spend Matters PRO brief analyzes the acquisition of ENGAGE Talent as a key milestone in the execution of Workforce Logiq’s innovation and transformation strategy. Taking a closer look at ENGAGE Talent (and what it does) is important, but it is at least as important to put the acquisition in the broader context of where Workforce Logiq is heading. Consequently, much of the brief will focus on that context.

This brief should provide a useful update for contingent workforce and HR executives who are thinking about where to go next with their existing MSP/VMS vendors.

SoftBank invests $1.65 billion in supply chain finance. Why?

At $100 billion, the SoftBank Vision Fund is both the largest private equity fund ever raised and one of the most complicated. On the heels of some public wounds with the likes of WeWork and Uber, I wondered why the keen interest in supply chain finance (SCF).

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:

Customer reviews for Vroozi are in the new SolutionMap Customer Insights report

This week’s SolutionMap Customer Insights report focuses on customer reviews for Vroozi, a provider of spend management, marketplace and invoicing automation solutions. The applicable SolutionMap category for this report is in E-Procurement, Invoice-to-Pay and Procure-to-Pay. SolutionMap Insider members can read about Vroozi in our latest report.

In each Customer Insights report, we provide a one-page summary of details from the SolutionMap peer review process. It includes ratings on how well the vendor meets its customers' expectations, three key differentiators for the vendor and a list of quotes from customers about the vendor’s greatest strengths.

5 tips on buying procurement technology (Part 3) — Find the right vendor for you [PRO]

In my Spend Matters PRO series on five tips to think about before you invest in procurement technology, we covered the need to identify the root cause for why you want to invest in procurement technology, as well as why you should learn how to walk before your run, which covers tips 2 and 3. In this, the final installment of the series, we will look at the last two recommendations.

To recap, the five tips are.
1. Identify business objectives ✅
2. Don’t try to do everything at once ✅
3. Focus on the basics first ✅
4. Select a solution and vendor that meets your requirements 5. Review and redesign processes, and perhaps even your organization, as part of the preparation and implementation

So, by now, you have identified the business objectives to why you need and want to invest in new procurement technology. You have also prioritized these objectives and planned out how to approach the implementation. Now the next step is to find the right solution(s) and implement them. So how do you do that? By having completed these first steps it becomes easier. But you still need to make sure that you find the right supplier that meets your requirements and make sure you are not led astray by vendor marketing. After that, you need to make sure the solution gets implemented properly.

Afternoon Coffee: USMCA clears hurdle; WTO paralyzed; Tariff delay; new Upwork CEO; SAP partners with project44

U.S. House Democrats have worked out a USMCA trade deal with the White House that could lead to the NAFTA replacement moving forward. In other trade news, the WTO's Appellate Body, which acts as the highest court for international trade, will in effect be paralyzed by losing more panel members. Also, new U.S. tariffs against China could be delayed from taking effect Sunday, the WSJ reports. In contingent workforce news, Upwork names a new CEO. In logistics news, SAP today announced a partnership with project44, which provides visibility for shippers and service providers. And former Boeing manager Ed Pierson told NBC News that he had warned the company about problems at its main factory in Washington state, prior to two of its 737 MAX airplanes crashing in separate incidents that killed 350 people. Afternoon Coffee: Stay safe out there.

Scanmarket CEO Betina Nygaard: ‘The e-sourcing process will change completely’

Many procurement technology firms have a short history before flaming out or being acquired, but one stalwart firm has hit a rare milestone — and has secured a strong future for itself. Scanmarket, the Denmark-based provider of strategic sourcing software, turned 20 this year — and made sure that the family business will carry on with the same mission. To learn more about what it takes to run a long-standing best-of-breed sourcing business, we talked to Scanmarket CEO Betina Nygaard for her insights about the past and the future of e-sourcing. "I think the e-sourcing process will change completely," she said.

AI can drive better supplier negotiations with faster outcomes

global trade

Today, most sourcing teams ask for quotes by emailing one spreadsheet to many suppliers and re-assembling the resulting chaos in a pivot table. Some technologies have helped digitize the process, but the basic information included remains the same. Companies ask for quotes, and suppliers send what they believe to be their best initial offer.

To find out more about how technology is improving supplier negotiations, we talked to Edmund Zagorin, the CEO of Bid Ops, a Spend Matters Future 5 award-winning company that offers a cloud-based sourcing enablement tool. Bid Ops describes its platform as the first AI solution for automating sourcing negotiations using adaptive target pricing, or “Willingness to Discount” formula, as they call it. Find out more in this Q&A.

How can manufacturers reduce risk in direct procurement? Deploy a secure, end-to-end solution

guided buying

“They supply for success.”

That sums up the BMW supply chain mission statement, said Doug Markle, the CEO of Allocation North America, in a webinar with BMW about how the automaker gets the most out of its manufacturing process.

BMW’s high standards and its technology combine to meet its drive for excellence. To create a competitive advantage, a manufacturer or business with complex operations must ensure a controlled, digitized management process across the entire production lifecycle. And BMW stated that it organizes all of its sourcing events by using Allocation’s ASTRAS software solution.

In Part 1 of this series on technology for direct procurement, research showed a need for manufacturers to upgrade their risky manual processes and digitally transform how they source parts, collaborate with suppliers, manage the lifecycle of parts and materials, and how they can add visibility and value across the whole business. Manufacturers can do that by having one technology platform that manages the entire manufacturing process — from requisition through end-of-life.

Two companies that have made that upgrade are BMW and INEOS Automotive, another manufacturer that participated in the webinar hosted by MetalMiner, a sister site of ours. Both automakers have deployed ASTRAS, which enables end-to-end management of the complex supply chain and parts lifecycle. And they’re having success.

A new species: Specialist providers of contingent workforce rate benchmarking/analytics [PRO]

Specialist providers of contingent workforce rate benchmarking/analytics services have emerged over the past several years. Based on our market scan, we have identified three such standalone, vendor-neutral providers — PeopleTicker, Brightfield Talent Data Exchange (TDX) and HCM Strategies. All three will be profiled at a high level in this Spend Matters PRO brief. A secondary goal of this brief is to begin to explore a broader, systematic research approach to understanding and comparing different rate benchmarking and analytics capabilities.

The estimation, or benchmarking, of contingent workforce “market” labor rates by job category is certainly not new, and rate benchmarking is widely used — or made available as a service — in practically every part of the contingent workforce supply chain (e.g., staffing suppliers, MSPs, VMS solutions, et al). But rate benchmarking data sources and methodologies have remained somewhat in the shadows for years.

Rate benchmarking produced within — and as just a part of — those contingent workforce supply chain providers has not made it easy to assess what lies behind the many different benchmarking approaches that are in use today. However, the emergence of third-party, vendor-neutral rate benchmarking and analytics service/solution specialists may help in doing so.

To compound the problem, there is currently no established framework that would allow for a comparison of different providers’ rate benchmarking approaches and allied capabilities (e.g., self-service, scenario-building and other capabilities). And, as “advanced analytics” (based on techniques such as data/text mining, machine learning, pattern matching, semantic analysis, simulations, etc.) provide a new foundation for rate benchmarking, the differentiation of approaches becomes more important over time.

Now, let’s take a look at PeopleTicker, Brightfield Talent Data Exchange (TDX) and HCM Strategies and then make some high-level observations about the group.

Lease spend is a hidden category worth millions in savings, strategic value for business

procurement

In most businesses, their millions of dollars in leasing spend represent a hidden opportunity for procurement and finance departments to find savings and create strategic value.

With every department in a business juggling leasing terms, financing and renewals for things like warehouses, offices, computers, supplies, furniture and fleets, it’s a daunting task to think any single department could manage it all. These are some reasons why lease spend isn’t managed well. But technology has developed to the point that it would be unthinkable to leave all of that spend unmanaged.

So it's clear that lease spend should be its own category, but why is that becoming apparent now?