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Program Management: The Missing Link in Procurement Technology Modules and Suites (Part 6 — An Introduction to SRM Programs) [PRO]

Global Risk Management Solutions

In our last set of posts, we addressed the basic requirements for any organization that wants to stand up a modern application to support sourcing programs that not only have a great user experience but are also backed by deep analytics. We went from basic program management requirements all the way to those that might seem near impossible to the average provider. We assure you they are not, although the chances of many providers meeting them are improbable, as we are requiring big leaps in typical back-office platform functionality.

But this is absolutely necessary. When people say that the creative process is 10% inspiration and 90% perspiration, the corollary is that for the average procurement professional, business processes are 10% strategic and 90% tactical. Not a good use of a highly educated individual's time. The tables have to be flipped so that strategic personnel can truly do strategic functions, not spend their days wrangling spend data, searching for new suppliers, assembling supplier qualification documents or doing manual contract review.

Changing this is not easy, especially because of the wide variety of programs that an SRM manager needs to implement. To crystalize the need for such extensive capabilities, we discuss some typical projects and how the technology-enabled experience needs to change for each SRM program.

LexisNexis Entity Insight: Vendor Snapshot (Part 2) — Product Strengths and Weaknesses [PRO]

LexisNexis Entity Insight (LNEI) is a modern, “self-service” supplier management solution that the global data/market intelligence giant built to satisfy increasingly surging market demand for all things supplier risk management. Designed as a cost-effective, off-the-shelf solution, LNEI helps procurement, finance and supply chain organizations manage risk across their own supply networks, regardless of how nested or complex.

This Spend Matters PRO Vendor Snapshot explores LNEI’s strengths and weaknesses, providing facts and expert analysis to help procurement organizations decide whether they should consider the provider. Part 1 of our analysis provided a company and detailed solution overview, as well as a recommend fit list of criteria for firms considering LNEI. The third part of this series will offer a SWOT analysis, user selection guide, competitive alternatives, and additional evaluation and selection considerations.

Program Management: The Missing Link in Procurement Technology Modules and Suites (Part 5d — Analytics Components) [PRO]

data analytics

Analytics is an essential component of effective program management. All processes within procurement depend on analytics, and the more individual tasks become integral threads in a tapestry of activity, the greater the value that the analysis of data brings to an organization.

But obtaining such value requires a software platform that supports the program, which in turn requires certain functional components to be successful. In this installment of our ongoing series on program management, we define the analytics solution components needed to facilitate both initiative identification and initiative support.

Program Management: The Missing Link in Procurement Technology Modules and Suites (Part 5c — Analytics Examples) [PRO]

Analytics

Perhaps more so than any other category of procurement software, spend analysis tools, used either as a standalone product or as part of a broader procurement suite, succeed the most when they bring together visibility and insights in ways that helps users take action. That’s why we’re focusing on analytics as we continue our series on how procurement can support broader enterprise program management. In our last installment of this series, we dove into various spend and supply analytics that support key enterprise programs. Today’s installment explores six of those analytics areas and provides examples worthy of consideration.

Program Management: The Missing Link in Procurement Technology Modules and Suites (Part 5b — Example Analytics within Enterprise Programs) [PRO]

analytics

In the most recent installment of this series, we explored how program management is a foundational capability that supports business transformation through a closed loop performance management process. If you’re a procurement organization that is trying to drive change in increasingly diverse, complex and collaborative areas, you’ll need to:

  1. Coordinate that enterprise-driven change vis a vis program management
  2. Align with your stakeholders on where you’ll add value
  3. Plan for the change and what it mean to you, stakeholders, and suppliers
  4. Bring forth your digital enabled supply management capabilities
  5. Execute (and keep coordinating)
  6. Measure your progress and adjust
  7. Rinse and Repeat
And as you do all this, you’re going to need analytics to find opportunities, prioritize projects, launch projects/workflows, manage KPIs and set up processes that have embedded analytics that allow them to adjust to changing conditions and spot risks that threaten them. In this installment of our series on program management, we’ll:
  1. Detail the analytic categories and specific analytics based on the program management life cycle
  2. Map enterprise programs to supporting analytics
  3. Dive into some selected analytics use cases and required technology components
And of course this will all be with a supply-side focus.

Program Management: The Missing Link in Procurement Technology Modules and Suites (Part 5 — Analytics Strategy) [PRO]

Procurement doesn’t just drive value through “steady state” sourcing activities that pop up in the enterprise. It helps lead the transformation of the extended value chain and also supports and improves enterprise-level transformation activities. In both cases, such transformational activities will require strong supply analytics that procurement organizations are increasingly supporting through procurement centers of excellence where analytics and market intelligence (especially for sourcing processes) occupy the top functions within a procurement CoE (see more on the topic of procurement CoEs).

Any experienced procurement professional knows that business alignment is critical. This alignment process inevitably leads to a set of enterprise-led (or procurement-led) programs that in turn require a set of analytics capabilities to support. In this Spend Matters PRO analysis, we’ll share:

  • A DuPont-style enterprise value decomposition to nearly two dozen enterprise programs and support supply analytics areas
  • How to frame supply analytics within an overall close-loop performance improvement cycle — and examples within each step of the life cycle
  • A drill down into some of the top enterprise programs into the specific analytics required
  • A further drill down and set of examples in some of the most used analytics

Program Management: The Missing Link in Procurement Technology Modules and Suites (Part 4 — Sourcing Components) [PRO]

If there is a glue that binds together different areas of procurement workflow, it is the overall program management of both individual tasks and collective activities across the source-to-pay continuum. This Spend Matters PRO series is designed to provide insight into what effective program management technology capabilities encapsulate from a design, platform and functional perspective.

In the last part of the series, we focused on sourcing and the types of sourcing programs that must be enabled by a modern sourcing or source-to-pay platform a modern user experience. In this fourth installment, we explore specific program management solution components that are required to enable the sourcing programs discussed in Part 3. In particular, we describe the specific overlay capabilities on top of sourcing technology to enable category strategy and realignment, re-sourcing, tail spend management, supply base rationalization and supply base expansion.

Program Management: The Missing Link in Procurement Technology Modules and Suites (Part 3 — Sourcing Programs) [PRO]

If there is a glue that binds together different areas of procurement workflow it is the overall program management of both individual tasks and collective activities across the source-to-pay (S2P) continuum. And nowhere in S2P is this more pronounced than in strategic sourcing.

This Spend Matters PRO series provides insight into what effective program management technology capabilities encapsulate from a design, platform and functional perspective. We explore both what represents best-in-class program management components today and what users might expect tomorrow.

Part 1 of the series explored effective program management overall from a strategy and process standpoint — and then from a technology standpoint. Part 2 provided a framework and insights into some of the functional (technology product) building blocks of effective program management, with a focus on project and portfolio management.

Today in Part 3 of this series, we examine sourcing and the types of sourcing programs that must be enabled by a modern sourcing or source to pay platform, with a focus on how they fit into broader program management.

SAP Ariba Launches A New Sourcing Front — Decision Optimization (Part 2: Solution Analysis) [PRO]

In a perfectly logical world, sourcing optimization would become the default means of the majority of strategic negotiations with suppliers. At Spend Matters, we believe its superiority to other sourcing techniques — especially in its ability to extend procurement’s influence to supply chain, finance and other areas of the business by incorporating multiple elements of data collection and analysis — is unmatched. But even though the benefits of sourcing optimization are real and core sourcing optimization technology requirements are well established, the capability today is more of an outlier than standard practice.

Might SAP Ariba be able with its recently enhanced sourcing optimization capability to bring optimization to the masses, and accomplish, at this point, what other more established solutions have not yet been able to achieve? Perhaps. But it will take more than the right capabilities to drive universal sourcing optimization adoption, as SAP Ariba’s competitors in the area have found. For the purposes of this Spend Matters PRO research brief, we’ll “constrain” our dataset to a much easier scenario to solve for: providing a perspective on how SAP Ariba’s current sourcing optimization capability stacks up against our core SolutionMap requirements for the area.

SAP Ariba Launches A New Sourcing Front — Decision Optimization (Part 1: Solution Components) [PRO]

SAP Ariba has opened a new front on the strategic sourcing optimization software battlefield. We recently received a detailed product demonstration of the next evolution of SAP Ariba’s decision optimization capability, as well as a glimpse of what’s on the roadmap. Our take is positive. SAP Ariba’s foundation and future plans represent a solid start in this area. And while other established providers of sourcing optimization tools have a decade-long head start, we expect SAP Ariba to progress faster in its optimization journey than many of its peers.

In this two-part Spend Matters PRO analysis, we begin with an introduction to the required solution components of sourcing decision optimization and an explanation of the benefits they can bring to procurement organizations. In Part 2, we offer an overview of SAP Ariba’s new decision optimization capability, exploring its strengths and weaknesses. 

Solution Provider Product and Technology Roadmaps: Are They Important? [Plus +]

spend visiblity

The short answer to the question posed in the title is emphatically and definitively “yes” — now more than ever. When screening or evaluating technology solution providers for e-procurement, contract lifecycle management, vendor management systems (VMS) or any other solution, there is frequently an inherent present and backward-looking bias in evaluating and making decisions about these solutions. Considering only what solutions have done or are doing for their clients (and ex-clients) only tells so much about whether or not the solution is a good fit.

There are probably a number of reasons for this bias, including that it may have led to optimal decisions in the past because vendors often over-promised and only partially delivered. But in today’s world, this bias can handicap a procurement organization given the growing number of new solutions and rapid changes in technology. Whether intentional or not on the part of the solution provider, “adverse selection” may come into play here — to the detriment of all. By not knowing where a provider plans or intends to (or actually can) take its solution in the future, the buyer is missing crucial information that could result in a bad decision. Making sure that roadmaps are reviewed and analyzed is an important way to mitigate this risk.

In this Spend Matters PRO research brief, we explore this problem and make suggestions to support ways to move beyond it, including how to look at a provider’s product and technology maps from a 2017 cloud-era frame of reference. For those who are new to this topic, we start with the basics, providing an explanation of what vendor product and technology roadmaps are, what they should contain and what you should expect.

Catalog Management: Technical and Functional Component Requirements (Part 5) — Catalog Contracts and Marketplace/Internet Search [PRO]

Today we conclude our multi-part research brief exploring catalog management functional and technical requirements with an emphasis on the last two requirements we consider in our SolutionMap functional requirements for e-procurement.

The first requirement that we analyze is what we term “catalog contracts,” capability which focuses on pre-negotiated pricing through group purchasing organization (GPO) arrangements, leveraged buying or otherwise third-party negotiated typically contracts outside of what a procurement organization would negotiate itself. The second area, marketplace / internet search and catalog visibility, extends the scope of catalog management capability to integration with online marketplaces (e.g., Amazon Business) and electronic commerce storefronts on the Internet, a requirement which is increasingly becoming more important in the evaluation of e-procurement solutions overall.

If you’re new to the series, check out Part 1 (overall definition/background and supplier network intersections), Part 2 (catalog creation, supplier onboarding and data quality control) and Part 3 (maintenance, workflow and analytics) and Part 4 (catalog objects/methods and catalog mobility capabilities, expectations and requirements).

Whether you’re a procurement organization, supplier, software provider or consultancy, our goal with this series is to provide the bill of materials to allow the assembly of the best possible catalog management solution, either on a unified basis with the same e-procurement platform or integrated with a broader solution.