Procurement Metrics - Premium Content

Top 10 Ways to Radically Expand Category Management Value Creation [Plus +]

category management

In the never-ending quest to deliver more value, procurement organizations are trying to squeeze more savings and innovation out of spend categories. But, eventually the well starts to run dry, and when that happens, you need to either get more out of that well (fracking for spend savings, perhaps?), dig a deeper well, find another place to dig, or find another way to get the water.

My point? To improve category management, which we sometimes affectionately refer to as CatMan, you sometimes have to expand it or blow it up completely. Here are some ideas that I’ve seen work elsewhere that can hopefully give you some inspiration and raise your category management game.

Using DMAIC 2.0 to Blow Up the N-step Procurement Process [Plus +]

An n-step chevron process is a siloed procurement-centered sourcing methodology geared towards supplier rationalization. It’s a fine start for procurement hitting cost savings goals, but it’s not a great way to align to the broader organization as procurement evolves. So, we’re proposing DMAIC as an emerging, superior approach, but it’s far beyond the DMAIC that you usually think of. The n-step sourcing process has had a good run, but let’s not try to make it do unholy things. Read on to see how other companies have used DMAIC.

Analytics8 SpendView: Solution Review & Analysis [Plus +]

Analytics

There’s a new spend analytics vendor in town: Analytics8. The Sydney-based provider recently introduced its SpendView product, an offering designed to bring modern, easy-to-use spend analysis capability to any organization with more than $10 million in annual spend at a reasonable price tag, but with functionality that is sufficiently deep to satisfy many of the needs of larger procurement organizations with unique requirements. This Spend Matters Plus analysis provides an introduction to the Analytics8 SpendView solution for procurement organizations looking to understand whether they should consider adding the provider to their shortlists for consideration and competitive alternatives.

Spend Compliance – The Framework: 50 Shades of Pay (Part 15) [Plus +]

procurement consulting

In previous installments of our 50 Shades of Pay series, we dove into spend analytics related to identifying potential savings from strategic sourcing, such as reduced pricing via competitive bidding to aggregate spending to preferred suppliers. Most large firms have some type of capability here, namely because of its criticality to strategic sourcing, a methodology that has been around for decades. In this installment, we will focus on how firms can expand their spend analytics to identify and fix non-compliance scenarios that cost real money and introduce real business risk. In this first of a 6-part mini series on spend compliance, we’ll introduce a framework you can use to guide your compliance efforts to get some hard ROI rather than just reduced risk. Let’s get started.

How to Create the Perfect Procurement Scorecard [Plus +]

In this Flashback Friday, we look back to another one of our most popular Ask the Expert webinars, Upgrade Your Procurement Scorecard – and Upgrade Your Procurement Performance. Originally recorded back in March 2014 and led by Chief Research Officer Pierre Mitchell, this webinar takes listeners through a variety of steps and questions a procurement organization will need to address to create an effective scorecard for tracking performance.

Adopting a Perfect Order Metric: Considerations, Tips and Benefits For Your Procurement Organization [Plus +]

Over on our sister site, Chief Procurement Officer, I have been discussing the perfect order measurement and how to adopt the metric for your procurement organization. While the perfect order metric may sound simple, the implementation can be complex. This Spend Matters Plus article will focus on how to address and overcome this complexity, as well as how to implement the perfect order effectively. I also touch on the benefits of perfect order, including how it enables better measurement of supply chain performance. If you want to measure perfect order performance, you have to ask yourself a lot of questions. Here are 5 key questions to ask and adapt to your organization regarding the perfect order metric.

Data ‘Enrichment’ is the Future of Spend Analysis: A Flashback to Our Most Popular Ask the Expert Webinar [Plus +]

It’s another Flashback Friday where we feature one of our most popular Ask the Expert webinars. Today's pick: Spend Analysis and Analytics: Theory and Practice, which was led by Gert van der Heijden, editor of Spend Matters Netherlands, back in March 2014. In this webinar, Gert focuses on the future of spend analysis, which he said would include advanced analytics and better data to improve risk management. Gert predicted “data enrichment” would be the next “buzzword” for procurement and spend analysis. While spend analysis is the basis for every procurement department, he said, that data needs to be “enriched” in order for the spend analytics process to be effective and valuable. Check out the full webinar recording here...

Best ‘Ask the Expert’ Ever? PPM: The Core of an Effective Procurement Operating Model [Plus +]

On this Throwback Friday (#tbf, anyone?), we've thrown open the doors to our archives to bring you our second-most-viewed recording of an Ask the Expert webinar of all time. Spend Matters Chief Research Officer Pierre Mitchell takes participants through the important procurement topic of PPM in Ask the Expert: Procurement Performance Management (PPM): The Ultimate Alignment Tool - Not a Dashboard! . Procurement performance management can transform a procurement organization – but only if you know how to apply and maintain the tool or process properly. Pierre walks us through a number of steps to properly integrate PPM into your procurement organization. If you missed this webinar late last year, luckily as a Plus or PRO member, you can view the entire recording right here.

Focusing on Efficiency with the AT Kearney 2014 ROSMA Benchmark Report [Plus +]

Earlier this week, we began our series analyzing the new AT Kearney 2014 ROSMA Benchmark Report, “Building the Brand of Procurement and Supply.” I first talked about the context and how the report analyzes ROSMA’s scores. Then, in a Plus post, I dove deeper into our analysis of the report, and I shared some of its highlights. Today, I’ll talk efficiency – what firms are the most efficient and why.

LeanLinking Brings Social Media Principles to Procurement and Supply Management [Plus +]

We've been talking for some time on the different Spend Matters sites about how social media principles and approaches will inevitably make their way into the business and procurement world, yet progress has in reality been pretty slow. The innovative Rollstream has been assimilated into GXS, now itself part of OpenText, and seems pretty low-profile these days. However, there are signs that things are changing. Sourcemap is a more recently established firm that has an interesting approach, including some aspects of supply chain collaboration with a social media slant. Mark Perera, one of the founders of Procurement Leaders, is involved in Old Street Labs, whose new Vizibl platform is in its testing phase (we'll feature it as soon as you're ready, Mark). The platform looks to use some of the core social media principles in a business environment. And now we have LeanLinking starting to make a splash. This Spend Matters Plus research brief, by Peter Smith (managing editor of Spend Matters UK/Europe), looks at what LeanLinking has to offer and which organizations would benefit from the technology.

Purchase Price Variance (PPV) in Procurement and Savings Strategy: Limitations and One Potential Use [PRO]

There are many reasons why purchase price variance (PPV) is not the best metric to track procurement performance. In last week’s Spend Matters PRO research brief, Why Purchase Price Variance (PPV) Should Be Banished From Procurement Measurements and KPIs, Jason Busch (Managing Director) and Pierre Mitchell (Chief Research Officer) gave 10 reasons why PPV can be misleading and how smart procurement organizations in the market have long since moved past it. These reasons include the fact that declining and rising cost variables outside of a buyer’s control can have a significant effect on individual part costs not reflected in the actual performance of a procurement manager and the fact that PPV fails to measure true lifecycle costs. In today’s Spend Matters PRO research brief, Jason and Pierre start by providing a summary of the first analysis and then explore a scenario where PPV may actually be a useful means of measurement, courtesy of Tungsten’s new network analytics capability.

What Really Drives Valuation For Technology Companies These Days? [PRO]

We’ve always found the subject of valuation for technology companies a curious topic, one that we could probably bore too many people with during cocktail hour conversations. Last fall, we wrote about the topic of valuation in the Spend Matters PRO brief Procurement Vendor Valuation, M&A, and IPOs: Recent Deals and 2014 Forecast, touching on many of the elements in valuation play right now. But this analysis says little for the fact that we appear to have a market at the current time that is bifurcated between certain vendors (e.g., Fieldglass) worth 8-12X topline revenue (or higher in the case of certain private investment rounds) and those like Intesource and Iasta which are going for less than two times their topline. In today’s Spend Matters PRO research brief, Group Managing Director Jason Busch and Spend Matters Group Managing Richard Lee offer up a perspective on what elements appear to be driving valuation and multiples in this market beyond the basics of SaaS and related valuation drivers in the procurement, supply chain, and finance areas.