Plus or PRO Content

Oracle Procurement Cloud: Vendor Snapshot (Part 1) — Background & Solution Overview [PRO]

You can almost set your watch on it. When ERP vendors decide to enter a particular solution market, impassioned arguments debating the tradeoffs of their approach versus the perceived benefits of those taken by specialized application vendors turn up the volume on a regular basis. “To ERP or not ERP,” that is the question. And while Oracle’s Procurement Cloud has not yet settled this debate, the offering will continue to draw the attention of many companies as well as Oracle’s installed base during their respective source-to-pay (S2P) technology evaluation processes, especially as Oracle’s solutions continue to improve and mature in the area and take their place as cloud-native solutions, turning entirely away from the ERP installed software legacy.

This Spend Matters PRO Vendor Snapshot provides facts and expert analysis to help procurement organizations make informed decisions about Oracle Procurement Cloud and whether its capabilities are a fit for their needs. Part 1 of our analysis provides a company background and a detailed solution overview, as well as a summary recommended fit suggestion for when organizations should consider Oracle Procurement Cloud. The remaining parts of this research brief will cover product strengths and weaknesses, competitor and SWOT analyses, and insider evaluation and selection considerations.

Everything Procurement Should Know About Payments: Best-in-Class P2P Technology Capabilities and the Reconciliation Process (Part 2) [PRO]

BuyerQuest

There have been two (somewhat bad) jokes around product naming since procurement technology adoption became widespread. The first was when SAP labeled its e-procurement product “supplier relationship management” (SRM), which was a misnomer, to say the least. SRM, which competed against Ariba, Commerce One and others at the time, was about managing transactional buying, not about strategic supplier relationships. The other naming “fail” was unfortunately more generalized outside of a single provider, and that was labeling the broader transactional procurement tech sector as “P2P,” with the second “P” standing for “payment.”

If there is a silver lining in this naming misstep, however, it’s that we have the power to actually do something about it today. P2P solutions are finally beginning to embrace the payment ecosystem more holistically, and procurement is taking an orchestration role in the process. This Spend Matters PRO series provides a procurement-centric view into payments, exploring the payments process and all that it encompasses through a “get smart” primer.

Part 1 provided an introduction to the topic and explored what e-procurement systems do (and do not do) to enable payment processes. It also explored what SAP Ariba and Coupa have developed from an integrated e-procurement, e-invoicing and payments offering perspective though various partnerships. The second installment in this series provides a summary checklist of best-in-class e-procurement and e-invoicing native payment capability and integrations (internal system and third party) to enable payments and an overview of the invoice to reconciliation process, outside of P2P systems alone. It includes an introduction to various electronic funds transfer (ETF) models, tax considerations, currency considerations and related topics. It also includes a look at all of the internal and external functions and parties involved in different stages of the reconciliation process.

Supply Dynamics: Vendor Snapshot (Part 3) — Summary & Competitive Analysis [PRO]

Spend analysis providers that tackled the “hard stuff” originally offered line-level visibility into buying activity based on invoice data. Such capability has now become standard. But what if you could go beyond line-level visibility when it comes to understanding spend data? And what if you could do this for supplier spending, as well?

For the majority of direct materials spend in manufacturing, nearly all approaches to analytics come up short when it comes to gaining insight into the underlying materials, spend and suppliers used for semifinished materials, parts, components, assemblies and finished products, either directly by the buying organization or passed-through based on supplier purchases. This lack of visibility not only increases both supply and commodity price risk but also stands in the way of driving innovative sourcing strategies that can drive hard dollar savings.

Yet one provider thinks they have the answer to this challenge: Supply Dynamics. Supply Dynamics combines its own form of spend classification, enrichment and front-end analytics based not just on information contained in ERP/MRP data but also on engineering drawing and bill of material information, using both data and metadata it extracts from design drawings. It also provides out-of-the-box capabilities to create material demand aggregation programs for metals, plastics, electronics and other sub-components (but that’s only one “savings” lever it brings, as we explore in this review).

This third and final installment of our Spend Matters Vendor Snapshot covering Supply Dynamics provides an objective SWOT analysis of the provider and offers a competitive segmentation analysis and comparison. It also includes recommended shortlist candidates as alternative vendors to Supply Dynamics, and offers provider selection guidance. Finally, it provides summary analysis and recommendations for companies considering Supply Dynamics. Previous installments provide an in-depth look at Supply Dynamics as a firm and its specific solution capability and a detailed analysis of solution strengths and weaknesses, as well as a review of the product’s user experience.

How to Attack Marketing Spend (Part 2) [Plus+]

The next topic we must address in considering the basics of attacking marketing spend is potentially the most sacred of all: agency selection. In considering how best to engage in this area, it is important to consider the costs of both sides going through the process. For agencies, the costs to manage and respond to an RFP can be quite high. Some agencies estimate their total cost at around $200,000 per RFP — on average!

Granted, the bulk of this expense comes in the form of soft costs. But the undertaking is considerable, and carefully vetted among agencies. This point is important to emphasize: agencies are quite picky about the clients and projects they bid on. We hope the following example, based on how one West Coast-based agency approaches RFPs, provides insight into the best means of engaging the right set of firms.

Supply Dynamics: Vendor Snapshot (Part 2) — Product Strengths & Weaknesses [PRO]

manufacturing

One of the major gaps today between supply chain planning and collaboration solutions and direct materials procurement technologies is the lack of spend/supply visibility for raw and semifinished materials used at different stages in the supply chain. These materials include commodities such as metals, resins, electronic components, chemicals and standard parts purchased by suppliers such as fasteners.

Granted, manufacturers are getting better at SKU-level demand planning and forecasting on both and inbound and outbound levels, not to mention managing all of the logistics associated with moving goods and materials. This is the basic “feeds and speeds” of the supply chain. Manufacturers also more frequently gaining visibility and orchestrating controls and processes around overall “spend” at the line item and supplier level, but this is only historical “spent analysis” of material consumption within their own four walls. Few companies have a true bill of material- and design drawing-level understanding of what upstream materials they’re buying vis-a-vie their suppliers. In other words, the lack of visibility into their suppliers’ spend and underlying costs prevents them from uncovering cost savings opportunities that are hidden upstream in their supply chains.

This is precisely where Supply Dynamics, a provider that specializes in multitier direct materials procurement, proposes to fill an important analytics and solutions gap through its SDX platform. It’s an area that even direct materials procurement technology specialists such as Jaggaer/Pool4Tool and SAP Ariba, with their new solution releases, do not begin to address effectively.

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

Supply Dynamics: Vendor Snapshot (Part 1) — Background & Solution Overview [PRO]

manufacturing

Direct materials procurement is similar in some respects to indirect procurement: you want to see your spend, aggregate demand and find opportunities to reshape your value chain to unlock value. But that’s where the similarities end. Analyzing direct spend (especially across multiple tiers of supply) is sometimes like seeing a cloud of smoke coming out of your tailpipe — you know there’s something wrong but don’t know the cause. For indirect spend, you basically change the oil, replace the air filter and hope for the best. But for direct spend, you need specific engine diagnostics to figure out what’s driving performance and how much you could potentially improve. And unfortunately, in many cases, the manufacturers of those engines parts don’t want you poking around under the hood.

Whether it’s for plastics, resins, hydrocarbon feedstocks, agricultural commodities, standard catalogue parts, electronic components or metals, you must translate your demand for parts into the raw materials that go into them. And you must understand the demand volumes, supply chain capacities and processing capabilities that drive that pricing — especially if you want to tap into aggregated buying channels beyond the stuff you buy to support your own internal factory requirements.

This intersection of supply chain modeling, demand forecasting, demand-supply reconciliation, demand aggregation and commodity price forecasting is where Supply Dynamics plays. The idea originated with one of North America’s largest privately owned metals distributors where the opportunity to roll up demand information across OEM customers and their outside contract manufacturers gave it a unique opportunity to build out specific analytics that would help it size up opportunities for its customers and itself. But last year that technology was liberated from its previous owners and is now a commercial offering for any manufacturer or distributor that wants to optimize its own extended supply chain.

This Spend Matters PRO Vendor Snapshot provides facts and expert analysis to help buying organizations make informed decisions about whether they need a solution like Supply Dynamics to expand their analytics initiatives into previously unchartered materials and supply chain components. Part 1 of our analysis provides a company background and detailed solution overview, as well as a summary recommended fit suggestion for when organizations should consider Supply Dynamics. The rest of this multipart research brief covers product strengths and weaknesses, competitor and SWOT analyses, user selection guides and insider evaluation and selection considerations.

Coupa’s Open Buy Solution with Amazon Business is a Game-Changer for Unified Catalog Management and Real Guided Buying [PRO]

Electronic catalogs are a pain in the ass. Twenty years ago, early e-procurement implementations were always dragged down by the work required to build electronic catalogs. And things haven't changed that much. The problem is that you force suppliers to publish (i.e., replicate) catalog content to their buyers’ various system or to electronic marketplaces — unless you use supplier-hosted catalogs that you “punch out” to. This is nearly always implemented as a Level 1 punch out, where the poor buying employee has to click on various supplier icons to get to the right websites where their buying experiences are controlled by the seller (i.e., “guided selling”) rather than the chief procurement officer (CPO) preferred metaphor of guided buying.

The next level of sophistication is a Level 2 punch out, where supplier catalog content sits next to internally curated corporate catalog items before a punch out occurs when the right item is found. The problem, however, is that a supplier still has to syndicate (replicate) all of the content that a CPO wants to expose to corporate employees. And it’s even worse because the type of catalog items in question are broad assortments of infrequently ordered items that make up tail spend. Are you really going to get someone like Amazon Business to syndicate content from hundreds of millions of items to your buy-side catalog? No. Also, the number of suppliers that support Level 2 punch out is extremely low (perhaps fewer than 100 suppliers globally), which is not surprising given that they have to syndicate massive catalogs to multiple channels. Syndication/replication is not a great long-term answer for anyone when an API can be built to serve up the content on demand.

Speaking of Amazon, Coupa has worked with Amazon Business to develop a Coupa solution called Open Buy. The offering changes the paradigm to allow “guided buying” through a more unified experience that actually implements Level 2 punch outs properly in a way that’s palatable to the CPO, employees and the supplier (i.e., Amazon Business doesn’t currently support the existing Level 2 punch out scheme — and we don’t blame them). In this Spend Matters PRO brief, we’ll examine how Coupa Open Buy works, how it’s different and some strategic implications for the market.

WorkMarket’s Acquisition of OnForce: Why It Takes a Village, Not Uberization [PRO]

We recently covered WorkMarket’s acquisition of field services execution platform OnForce from the staffing industry giant Adecco Group. While this M&A activity could easily be viewed as just a “tuck in acquisition” (into WorkMarket’s field services solution vertical), it is really more than that. Considering the comprehensive deal and its context provides a different perspective on the strategic development of this particular digital work platform, as well as on digital work platforms in general.

This Spend Matters PRO brief addresses HR and contingent workforce procurement practitioners who are trying to understand the emergence of digital work platforms and the ongoing transformation of the enterprise and the execution of work. It provides an overview and introduction to OnForce and WorkMarket, offers sector definitions to cut through the jargon and introduces the different components of the field services contractor management technology market as well as alternative providers.

Finally, it offers analysis on the future of the OnForce/WorkMarket combination and the future of online work intermediation platforms in general — and why collaboration and ecosystem relationships are key to driving change in established B2B industries.

Everything Procurement Should Know About Payments: Procurement’s Role and P2P Case Examples (Part 1) [PRO]

E-procurement is essentially what is sounds like. The same goes for e-invoicing, too. But when you add payments to the equation, things get messy.

Whether procurement and finance organizations are looking for an integrated procure-to-pay (P2P) solution or standalone invoice-to-pay (I2P) technology, the notion of either solution incorporating end-to-end payment and reconciliation capability is misleading at best. Granted, some providers, such as SAP Ariba and Coupa, have taken steps toward enabling the payment lifecycle through partnerships. But their payment solutions focus on the outcome rather than providing a broader toolbox around payment process management and reconciliation for buyers and suppliers alike.

How can these vendors, which deal predominantly in indirect goods, influence the total payment picture?

This Spend Matters PRO research series unearths the often misunderstood components of the “second P” in P2P. We start with a high-level overview of what procurement systems do (and do not) do today to enable payment processes, as well as what procurement’s responsibilities for payments are (and are not). We also profile what SAP Ariba and Coupa are enabling on the payments front, as well as the general approaches of other vendors.

Subsequent briefs in the series will provide a detailed summary of best-in-class e-procurement and e-invoicing native payment capability and integrations to enable payments, a detailed overview of the invoice to reconciliation process, an exploration of P2P and payments best practices, and guides for how to set up suppliers for payment in a system, the integration of cash management and payments, how to think about trade financing and payments, and the role of shared services in payments.

How to Attack Marketing Spend (Part 1) [Plus+]

Torchlite

Like MRO, packaging and logistics, the marketing category straddles the boundary between direct and indirect spend. And we all know (or so marketing folks claim) that it has a substantial impact on sales — allegedly, at least. The direct commercial impact is notoriously difficult to assess, although the new breed of analytics-driven spend analysis tools targeted specifically at marketing spend (e.g., cross-channel, competitive insights, etc.) and campaign performance can help. But put these in the agency parking lot for a minute. We’ll get into them later in this analysis and series.

For now, let’s focus on the marketing category as one among many — what makes it unique, what makes it similar and what are important trends.

The Emerging World of Digitally Intermediated Work: Old vs. New — or Something Else? (Part 2) [PRO]

The digital transformation in contingent labor and outcomes-based services within procurement today is happening now. In contrast to indirect procurement and direct procurement, where traditional intermediaries and sourcing models have remained largely untouched by limited new disruptive entrants, the services procurement sector is in the early stages of transformation due to fundamental changes in labor-driven connectivity to demand.

Although adoption of these solutions has varied to date, incumbent staffing, consultancy and other labor intermediaries are indeed coopting and engaging these new models — an important indicator of their trajectory. Moreover, to deny this trend is to turn your back on dozens of solutions that connect specialized labor markets with end users in the business, not to mention the hundreds of millions in funding that these new, innovative intermediaries have received in recent years.

This two-part Spend Matters PRO research brief explores the evolution of digitally intermediated work. In the first installment, we explored digitization in the context of new staffing and labor models today, explaining how these new models can complement and work alongside traditional incumbent approaches. We also explored how organizations can incorporate labor-based digitization into familiar contingent and services procurement models and practices. In Part 2, we turn our attention to summarizing the key trends that procurement, HR and IT practitioners need to be aware of, and we provide key recommendations to put digital services transformation to work for you — rather than against you.

The Emerging World of Digitally Intermediated Work: Old vs. New — or Something Else? (Part 1) [PRO]

digital business transformation

Fact: New, digitally enabled models and marketplaces for sourcing labor, talent, skills, expertise and services have started to emerge in recent years. Yet “talent brokers” have always existed in the labor market — work arrangements have long been intermediated by staffing firms and service providers. Viewed from this lens, what is happening now is not so much disintermediation of those intermediaries but rather the emergence and evolution of new intermediation models that, at their core, take advantage of digital technologies. While these models are appearing in the market as new solutions offered by new companies (e.g., Upwork, Catalant, Hired, WorkMarket), gradually they are also being incorporated and adopted by incumbent staffing and service provider intermediaries (e.g., Randstad, GRI, MBO Partners, PwC, Deloitte).

This two-part Spend Matters PRO research brief explores the evolution of digitally intermediated work. In the first installment, we take inventory of the current staffing and labor models today and how digitization alters the structure and properties of work compared with staffing models. We also explore the comparative sourcing and provisioning of digital talent, as well as how organizations can structure and consume these new services — compared with traditional approaches. Finally, we consider the current state of digitally enabled work arrangements and intermediaries. In Part 2 of this series, we summarize and structure key takeaways from all of the current trends and provide recommendations for practitioners.