Plus or PRO Content

Procurement KPIs Series (Part 4) — Deep Diving into ‘Spend Under Management’ [PRO]

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One of the goals of a business is to have as much spend (with a capital “S” for all expenditures: CapEx, OpEx and COGS) under management as possible. And that goal should be extended out to supplier spend, where procurement wants to have as much supplier spend influence as possible. That way you know what you’re spending on suppliers (and the pricing component of that, of course), what you’re getting from those suppliers (i.e., supplier performance), and how well you’re spending in terms of applying best practices and tools/intelligence to the process (e.g., proactively guiding stakeholders and minimizing maverick spend).

The metric of spend under management (SUM) is actually determined by a set of indicators that we’ll explore in this latest Spend Matters installment of our series on KPIs that all procurement leaders should know. In the first two parts of this KPI series, we highlighted some of the foundational measurements for procurement pros and the problems of traditional procurement key performance indicators in terms of how they can be incomplete, misleading and even damaging to a value chain transformation. We also delved into the “keys” that unlock the value of spend and supply management.

For spend under management, we’ll explore the true spirit of how this metric is used, what role technology plays and how to get a balanced scorecard for different segments of supply base management.

Banks can do business payment innovation too: A look at U.S. Bank’s Instant Card [PRO]

Millions of employees across the globe have adjusted to working remotely.

Amid the coronavirus disruption, some regions are beginning to see storefronts, businesses and factories slowly re-open. Whether employees are working remotely or starting to go back into the office, they need a way to make business purchases for things like home office supplies, PPE and cleaning essentials without having to use their personal credit cards.

In response, U.S. Bank fast-tracked the development of the U.S. Bank Instant Card, a fast, efficient and simple way for employees, contractors or consultants to make business purchases without complex expense reports or the need to be reimbursed.

This new solution allows a manager to instantly push a virtual corporate card to a mobile wallet for immediate use to make approved purchases, and they have the option to do it contactless. In essence, they created a replacement for petty cash with a quick and easy way to distribute a virtual card.

When it comes to innovation, banks are both not known for it, and certainly not in a speedy implementation fashion. But times are a changing, and the COVID-19 pandemic led U.S. Bank’s commercial payments group to figure out how they can help their 300,000 emerging middle-market customers develop a way to get petty cash in the hands of employees, contractors and other third parties quickly.

In this Spend Matters PRO article, we’ll take a look at the Instant Card and its capabilities.

An Executive’s Guide to Direct Sourcing of Contract Work/Services (Part 2) — Technology [PRO]

Direct sourcing is a popular topic among contingent workforce practitioners today, and a significant number of organizations are either looking into it or starting to do it.

But there is a lot of confusion about the concept.

This three-part Spend Matters PRO series tries to put direct sourcing into perspective by offering executives a way to break it down in an observation-based, meaningful way.

In Part 1, we covered how the direct sourcing of contract workers and services has changed over the past 10 years, what it is today, what benefits it offers and what the emerging “direct sourcing ecosystem” consists of. We explained that the direct sourcing model, which has been taking shape in the last five years, is notable in a number of ways:

  • It is very much intertwined with digitally enabled self-service trends, new but maturing technologies (e.g., cloud, mobile, data analytics, AI, etc.), and the ongoing unfolding of enterprise digitalization.
  • It is a new and different sourcing channel, which can be looked at on three levels: program, process and technology.
  • It is part of an emerging digital ecosystem that includes:
    • “Buy-side” organizations
    • Established cloud, broadband and near ubiquitous wireless/mobile infrastructures
    • Millions of digitally connected contract workers and small service providers
    • Pure-plan providers of purpose-built enterprise technology solutions
    • Providers of IC-compliance/AOR and/or payroll/EOR services;
    • Multi-line contingent workforce BPOs (i.e., MSP/RPO),
    • Providers of digital work/services platforms (e.g., marketplaces, contest sites, etc.)
    • Contract worker sourcing specialists
    • Other supporting services providers (e.g., background checks, insurance, payments)

Part 2 of this series examines purpose-built enterprise technology solutions that are focused specifically on the direct sourcing of work from contract workers and/or services provided by small-scale service providers (SSPs). The focus is on what technology solution providers are in the market today, what these solutions do and how they differ in potentially important ways. We do this based, in part, on our SolutionMap demos and discussions with solution providers.

Part 3 will consider the implementation of direct sourcing programs and provide some guidance on what to expect.

Product cost management tool overview: Galorath’s SEER suite of costing solutions (Part 2) — Use cases, implementation, ROI and summary analysis [PRO]

Hello there, spend analytics / Product Cost Management crowd. Welcome to Part 2 of this Spend Matters PRO series on Galorath’s SEER suite of software tools for product cost modeling.

In Part 1, we told you about our summary of the product suite from an executive point of view, and we looked at the SEER solution capabilities in detail, which are extensive. But that’s no surprise since Galorath has been focused on knowledge-based project and product cost estimation for over 40 years.

In this installment, we’ll explore the use cases (manufacturing, software and even space), discuss implementation/ROI, detail its data capabilities and offer a summary analysis of Galorath’s SEER.

Product cost management tool overview: Galorath’s SEER suite of costing solutions (Part 1) — Solution overview [PRO]

Hello there, spend analytics / Product Cost Management crowd. In March, we started our series on deep dives into product cost management tools, looking at WTP, What's the Price. Recently, we continued the PCM product round-up with a two-part review of aPriori here and here.

Over the last few weeks, I have spoken with some of the senior executive team at Galorath Inc., a firm that has been on the forefront of knowledge-based project and product cost estimation for over 40 years. Galorath makes the SEER suite of software tools. I caught up with their VP of Product Development, Karen McRitchie, and VP of Strategic Sales, Brian Glauser, to view in-depth demos and explanations of some of their products (you too can view some of these demo’s on Galorath’s YouTube channel).

This two-part Spend Matters PRO series will include a company background, a solution overview and a detailed look at its capabilities. Part 2 will explore the use cases (manufacturing, software and even space), discuss implementation/ROI, detail its data capabilities and offer a summary analysis.

So, let’s continue on our walk through the enchanted forest of spend analytics / costing software solutions with a look at Galorath’s SEER.

Spendata: Rewriting Spend Analysis from the Ground Up [PRO]

Two years ago, we introduced you to Spendata (in our PRO Vendor Analysis Part 1 and Part 2 series) as one of the newest entrants to the spend analysis space, founded by some of the oldest veterans in the market. They've been designing and building analytics solutions for over two decades, and have already defined and redefined the market twice.

And while Spendata was again redefining the market since launch with an in-browser solution that matched the power of many best-of-breed solutions at 1/10th to 1/100th of the price tag — a solution that could be used by any procurement professional with little to no training in minutes (with easy file-based data uploads) — its recent innovation trifecta is set to truly change the game. No other vendor has any of these capabilities! (The author has evaluated dozens of leading solutions over the past two decades and has never seen anything close.)

If you’re only going to read one article on spend analysis this week, this month or this year – make it this one, as we essentially describe the new foundations for modern spend analysis.

Healthcare services procurement solution Medpricer becomes Conductiv — and expands scope [PRO]

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The third-party services procurement solution provider Medpricer recently announced its rebranding and its name change to Conductiv. The company also announced the addition of new offerings. Conductiv is owned by Premier Inc. but operates as an independent business entity, with its own branding, product line and market strategy.

Partly based on a recent conversation with Conductiv CEO Chris Gormley, this Spend Matters PRO brief takes a look at the company, where it is today and where it’s headed — including the potential application of the solution in non-healthcare verticals.

Aligning your digital P2P strategy to your ‘post COVID-19’ business environment (Introduction) [PRO]

Companies’ plans and the markets' demands for procure-to-pay process digitization have accelerated and evolved over the last five years, but that change is nothing compared to the COVID-19 disruption seen in the first half of 2020.

The coronavirus crisis made all organizations react and rethink the pace of their digital transformation strategies, which now often must be carried out in months rather than years. As we say in Mexico, "El miedo no anda en burro" or "fear does not ride a donkey,” which means it hits you fast.

Digital transformation (in this case for P2P processes) must now take place ASAP — especially if you’re trying to match invoices back to manual contracts that are sitting in the deserted office! Organizations can no longer think that situations like COVID-19 will never happen again, and businesses that do not digitize their processes now will not be able to compete or even survive.

But to have a great P2P digital strategy, there is more to understand. The changes that businesses are facing are not just about those caused by COVID-19; it is about those forces that are magnified by COVID-19: geo-political accommodation that is happening in the world, the change of global powers, oil prices, gold, the U.S. dollar volatility, social responsibility, global sustainability, global supply chain risks, security.

All of these and other factors greatly affect "B2B procurement" — and we intend to discuss what can be done about it.

The goal of this Spend Matters PRO series is to support buying organizations with a list of key questions (and potential answers) to build a solid and holistic procure-to-pay digital strategy. I will outline 10 major business requirements within the current environment that require strong P2P capabilities. I will then highlight 13 critical digital P2P capabilities that support these requirements.

P2P becoming central to meet key business demands

P2P solution providers know that today is the perfect time for procurement to generate value for a business because COVID-19 has disrupted supply chains (see our Coronavirus Response series here) and the crisis has shown that P2P activities have become central to keeping businesses' operations on track, efficient, financially healthy (and keeping suppliers healthy too), and protected from risk/fraud. P2P is obviously more than just issuing POs and processing invoices, but also includes capabilities (described in great detail in our SolutionMap vendor rankings) such as:

  • Integrating e-procurement, e-invoicing and e-payments processes with each other and also to upstream sourcing and supplier management processes.
  • Keeping spend under management, in compliance, optimized and risk-free (e.g., supporting category management objectives)
  • Supporting effective cash-flow planning, monitoring and “optimization” (e.g., with supply chain financing possibilities)
  • Strengthening suppliers collaboration and relationship management as everything is becoming virtual

These business demands are core focus areas for companies. And there are new ones — but let's first illustrate how a changing business environment, a constantly evolving global organization, an ever-growing and more prepared competition that pushes to keep innovating, etc. are making all these demands continuously evolve. They are creating a more complex P2P scenario for all organizations that the P2P strategy and solution providers need to support to keep businesses’ eyes on the prize.

Just as an example to illustrate how business demands are evolving, let’s consider this: Not long ago, the most important topic in B2B procurement was to achieve e-procurement user adoption in order to increase spend under management. Vendors such as BuyerQuest and Coupa came up with an Amazon-like user interface, which became the most important e-pro feature to have.

Today that is not enough.

Now the UI is more about having the user experience (UX) not just delight the users, but now includes “pathing” them on intelligent workflows — and this intelligence keeps evolving and improving. The changing business environment keeps ratcheting up new demands for P2P processes and the value they need to create. It’s not an easy task to meet those demands, but it is possible with today's emerging technologies and system's integration platforms.

In the rest of this Spend Matters PRO article, I will discuss the business issues/requirements that P2P leaders need to satisfy in order to align with them and deliver P2P value, and then use this to discuss the critical P2P capabilities needed to support them. Only then can these leaders (and supporting solution/service providers) align their digital capabilities to them as well.

In future analyses, we’ll dive into these specific capabilities, link them to business pain points (and ROI and business cases), and detail what digital strategies and providers can help implement them.

An Executive’s Guide to Direct Sourcing of Contract Work/Services (Part 1) [PRO]

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Direct sourcing of work/services, in the simplest terms, means sourcing workers/providers without traditional intermediaries like a recruiting firm or temporary staffing agency.

It is not a new practice, but over the past several years, it has become something significantly different than what it was 10 years ago.

While direct sourcing — particularly of permanent workers — is old as the hills, a new and distinct way of direct sourcing contract work/services has been emerging in only the past five years.

This three-part PRO series is intended to provide a practical executive’s guide to this emerging form of direct sourcing of work/services.

  • Part 1 examines: (a) how direct sourcing has changed over the past 10 years, (b) what it is today and what benefits it provides and (c) what the emerging “direct sourcing ecosystem” consists of today.
  • Part 2 looks at current direct sourcing technology: (a) what it does and (b) what technology solution providers are in the market today, what they do and how they differ. We do this based on our SolutionMap demos, scoring and ranking — as well as discussions with solution providers.
  • Part 3 considers the implementation of direct sourcing programs and provides some guidance on what to expect.

Making Sense of Supply Risk Management Solutions (Part 3) — A Look at 8 Supplier Management Providers [PRO]

“Supplier management,” often called “supplier lifecycle management,” is an area that procurement practitioners struggle with because of its complexity (as is the intersecting area of supply risk management that we’re covering in this series). Supplier management generally breaks out into two main areas:

  • Extracting value from supplier relationships. This includes supplier performance management (SPM), supplier relationship management (SRM), and supplier quality management (SQM)
  • Protecting that value through supplier risk management (and ancillary supplier compliance management) that we’re drilling into in this series

Note that supplier information management (SIM) is also part of supplier management and manages the core information that supports risk and reward from above — and the information/intelligence requirements for supplier risk management are immense. For more on this definitional stuff that practitioners will find useful as well, see our PRO article here, and from a technology market/provider standpoint, we analyze these supplier management solutions in our SolutionMap vendor rankings and benchmark database.

Part 1 of this Spend Matters PRO series gave an overview of supply risk management solution market, the issues for enterprise risk and the types of solution providers available. Part 2 began our look at nearly 50 providers in this space by comparing four vendors in a key area — supply chain risk management (SCRM).

In this Part 3 of the series, we’ll examine a group of the top-performing supplier management providers, including both “suite” vendors competing in the source-to-pay (S2P) market as well as best-of-breed specialists. Both have a key role to play in the broader supply risk management market. This Spend Matters PRO analysis provides insight into this group of vendors, which we describe as supplier risk management providers. It is the third-part of our series exploring the broader supply risk landscape (which goes beyond supplier risk).

This brief provides an overview of where and how providers like Allocation Network, APEX Analytix, Coupa, HICX, Ivalua, Jaggaer, Procurence and State of Flux “fit” alongside other types of vendors targeting supply risk management. It describes specific solution capabilities they offer and provides examples of common risk use cases.

This PRO analysis also includes a capabilities ratings matrix for supplier risk management of those eight providers, based on the latest SolutionMap dataset from 2020. The vendor ratings matrix compares 10 capabilities, including supply risk, enterprise risk, risk assessments, mitigation planning and regulatory compliance.

While these eight providers are not a substitute for supply chain risk management specialists such as Resilinc, riskmethods and Resilience360 (which we rated on 18 capabilities rather than 10), they provide deeper and essential functionality from a core supplier and entity-level management perspective.

Finally, we should note that while the top-performing providers mentioned above do not represent an exhaustive list of all supplier management providers with capability to support supplier risk management, it is a strong sample as a starting point for those exploring capabilities in this area. Each has something unique to offer — and opportunities to address.

Let’s dive in!

Making Sense of the Supply Risk Management Solution Landscape (Part 2) — Comparing 4 Supply Chain Risk Management Vendors [PRO]

In Spend Matters’ previous installment of this PRO series, we highlighted the fact that just as there is not a single type of enterprise risk, there is not a single, defined market for procurement and supply chain risk solutions that address these risk elements. We segmented the supply risk market into eight areas that integrated upward into the enterprise risk management (ERM) and the governance, risk and compliance (GRC) space, while also drilling down into some key risk types, spend types, risk processes (e.g., monitoring vs. structural mitigation), and areas like fraud monitoring and contract risk management.

In the remainder of this series, we will explain these different segments and introduce nearly 50 (yes, fifty) providers that help solve various aspects of the supply risk problem. We’ll also offer some advice on how to mix and match these solution providers depending on your objectives and your constraints.

In Part 2, we start by diving right into what is arguably the most important sub-sector within this market — supply chain risk management.

This sector includes providers such as Resilinc, Resilience360 (a DHL spinoff) and riskmethods. Spend Matters PRO will publish individual vendor reviews of these three providers (as well as Prewave) later this summer. But for now, we offer quick introductions to these providers and a ratings matrix to show how they compare — and which of them offer differentiated capabilities.

The vendor ratings matrix compares 18 capabilities, like supply risk, enterprise risk, data sources, category modeling, and visualization. (PRO subscribers can click this post to see the detailed scoring.)

XTRM: Solution Overview (A payments focus on digital wallets, cross-border capabilities) [PRO]

Over the last year, there has been a huge investment by the payments community to create digital wallets for business customers to enable fast and cost-effective cross-border payment capabilities. These solutions are becoming popular with many money-movement companies. These providers are embedding wallet apps in their products so their customers can make global disbursements.

Wallets enable companies to manage multiple account balances globally and make disbursements to beneficiaries at any time. Having a multi-currency wallet enables disbursements to happen in the local currency of your beneficiaries. There are numerous business applications for the use of wallets. Some examples include:

  • Small- and medium-size businesses that make disbursements to global beneficiaries for rebates, incentive payments, referrals, etc.
  • A lead-generating company that needs to make referral payments globally.
  • A wealth manager that needs to make payouts in multiple currencies to depositors.
  • Independent contractors and sole proprietors who need to pay gig workers globally.

More and more solution providers are looking to provide the banking infrastructure and sub-ledger account management to hold money in wallets to supplant bank account-to-account transfers. B2B payment companies see wallets as a revenue opportunity. When money goes into a wallet, there may be additional foreign exchange (FX) conversions and transfers to beneficiary-owned bank accounts.

The payments provider XTRM has built a model around moving money between wallets and taking away the pain in cross-border B2B payments.