PRO Content

The 12 Supply Risk Management Disconnects that Destroy Value (Part 1) [PRO]

risk

“Risk” and “risk management” are terms that are like the ultimate Rorschach test in business: they mean many different things to many people. The same applies to the term “value” — and don’t even bring up “supply management.” Even a specific term like “supply risk” has many interpretations (e.g., it’s much more than supplier risk). The problem with this is that if people within a company define various terms differently, then how well will they be collectively managing those areas? Likely not well at all.

Risk management is a strange animal. On one hand, it focuses on “things gone wrong” and hones in on defining and mitigating various external risks that create adverse events in a value chain. On the other hand, those adverse events affect stakeholder-relevant performance (i.e., measurable value). Such performance and value delivery is focused on “things gone right” and reward rather than risk.

The key, therefore, is to realize that risk and reward are inextricably linked. If ensuring delivered value (and improving it over time) from the supply chain and from suppliers is what supply management is all about, then that supply value should not only be expected (i.e., expected value like discussed above) but also protected (i.e., protected value ensured through supply risk management). As a side note, have you ever considered that the concept of “expected value” uses the term “value” even though it is applied heavily to the world of risk management (i.e., calculating the expected probabilities and impacts of various risks)?

Anyway, the imperative becomes ensuring that the most important performance metrics (i.e., KPIs) are protected from risk. Yet these individual KPIs are rarely individually and systematically managed for risk, and the lack of risk-adjusted performance management means that you’re going to be exposed and it will catch up with you eventually. The problem isn’t just bouncing around and applying risk management technique X via tool Y to address risk type Z. There are a dozen fundamental disconnects in most firms that prevent risk management being properly resourced, aligned, managed and improved. Only by unpacking them and addressing them through focused practical interventions can you really get to the root cause issues that are likely keeping your supply risk management efforts suboptimized.

In this Spend Matter PRO series, we will explore 12 critical supply risk management disconnects. This brief, Part 1, focuses on the following four areas:

  1. Risk Scope and Stakeholders
  2. Performance vs. Risk
  3. Risk Type vs. Impact
  4. Risk vs. Cost (e.g., “cost of risk”)
If you’re a practitioner, you should be able to see which disconnects are the biggest issues for you and make yourself more resilient (i.e., ability to mitigate and recover from risks) and predictably high performing. If you’re a consulting organization, you’ll probably find some pointers to improve any methodologies that you have here. And if you’re solution provider, whether in the supply risk management area, or more broadly, you’ll hopefully get some ideas on how to address more strategic pain points.

E-Procurement 2018 Trends and Forecast (Part 2: Provider Analysis) [PRO]

The pace of change in the e-procurement market is moving faster than a speeding cXML document flying across the internet. Software vendors are innovating more quickly than ever before; solutions are no longer are just “software” but come preloaded with a dizzying array of additional items that are difficult to compare on an apples-to-apples basis; and customers are coming in smarter both in “new” and “replacement” deals, with greater expectations from provider solutions than ever before, especially the rate at which they’ll begin to realize benefits.

Today we publish the second installment of our 2108 procurement technology trend and forecast series, focusing on solution provider trends and priorities within e-procurement market. Part 2 of this series provides an analysis and exploration of two provider trend areas: continued M&A consolidation expectations in the e-procurement market (fasten your seat belt on this one) and rising procure-to-pay (P2P) and business-to-business (B2B) intersections, including a quantitative look at the rise, definition and size of B2B e-commerce today. Following today’s analysis, the final installment in this series will feature three additional trends and conclude with our 2018 e-procurement market forecast.

So without further adieu, let’s introduce some controversy, data, practitioner recommendations and (hopefully) insight on the first and arguably the most important near-term provider trends Spend Matters is already seeing evidence of early in 2018.

LUPR: Vendor Snapshot (Part 3) — Summary and Competitive Analysis [PRO]

The market for supplier management technology is complex. Not a single provider that Spend Matters has reviewed as part of our PRO and SolutionMap analyses comes with out-of-the-box capabilities to competitively and fully support the myriad of solution components in this area, spanning supplier discovery, supplier on-boarding, supplier information management (SIM), supplier master data management (MDM), supplier performance management (SPM), supplier risk management, supplier diversity enablement and supplier quality management. Granted, some technology providers come close. But most opt to specialize in one or a handful of supplier management disciplines.

LUPR is one such provider, specializing in strategic supplier management (primarily supplier quality and supplier performance) in support of manufacturers and direct materials procurement initiatives. This final installment of our multipart Spend Matters PRO Vendor Snapshot series covering LUPR offers a SWOT analysis, a competitive assessment and comparisons with other providers in the supplier management market. It also includes a user selection guide and summary evaluation and selection considerations. Part 1 and Part 2 of this PRO research series provide a company and deep-dive solution overview, product strengths and weaknesses and a recommended fit analysis for what types of organizations should consider LUPR for supplier management initiatives.

LUPR: Vendor Snapshot (Part 2) — Product Strengths and Weaknesses [PRO]

This vendor snapshot series is focused on LUPR, a new entrant in the supplier management technology arena. Pronounced “looper,” but not spelled looper, as that's a media site dedicated to bite-sized entertainment news and pop culture, and procurement technology is usually not that scintillating, the name certainly caught our attention. And maybe yours.

Perhaps you’re chuckling about the various puns on the name LUPR (e.g., that supplier threw me for a …). But once you get past the name — which we believe positively calls out and reinforces the need for closed loop supplier and customer engagement — it becomes clear that LUPR is addressing a number of areas that most procurement organizations have not yet gotten around to automating through technology outside Excel, primarily centered on supplier quality and supplier development in a direct materials context.

Built on the Salesforce platform, LUPR has two different solutions: a buyer platform and a supplier platform, which is free for suppliers to use. This Spend Matters PRO Vendor Snapshot explores LUPR’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 and a recommend fit list of criteria for firms considering LUPR. The third part of this series will offer a SWOT analysis, user selection guide, competitive alternatives, and additional evaluation and selection considerations.

LUPR: Vendor Snapshot (Part 1) — Background and Solution Overview [PRO]

While not all procurement groups have adopted the “supplier” flavor of customer lifecycle management — that is, supplier relationship management (SRM) — an increasing number of organizations are taking the plunge and purchasing supplier management capabilities, either from standalone providers or as part of integrated suites — and sometimes both. The SRM sector is a crowded one, and Spend Matters has covered many of its newest entrants. From specialized initiative management providers to on-boarding and master data management (MDM) specialists and spend-specific vendors (e.g., manufacturing, services) there is no shortage of solutions to choose from, let alone individual technology providers.

One of these new entrants, LUPR, was co-founded by Sean Harley, a former colleague of one of the authors of this brief. (Harley and Jason Busch worked together at FreeMarkets). The name LUPR is a play on words, as one of the goals of the firm is to close the loop between buyers and suppliers with relevant data to help both parties sustain relationships, improve quality levels, resolve performance issues and collaborate on innovation. LUPR is not yet a full-featured supplier information management solution, but it does go deep in specific supplier management areas and excels in meeting a range of initiative-based requirements for manufacturers.

But in such a crowded market, the question remains: Is LUPR different enough to succeed? Maybe.

This Spend Matters PRO Vendor Snapshot provides facts and expert analysis to help procurement organizations make informed decisions about LUPR and whether its technology and solution capabilities are a fit for their needs. 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 LUPR in the supplier management and quality management areas. The remaining parts of this research brief will cover product strengths and weaknesses, competitor and SWOT analyses, and insider evaluation and selection considerations.

Sourcing Head-to-Head Technology Evaluation and Comparison: Coupa and Jaggaer (BravoSolution) [PRO]

When it comes to functional capability, BravoSolution (now Jaggaer) and Coupa are the two providers to beat.

Jaggaer’s sourcing strengths should come as no surprise to those familiar with its history. Coupa’s rapid e-sourcing ascent, however, will surprise many. It went from laggard to leader in the sourcing technology sector when the ink dried on its agreement to acquire Trade Extensions. Regardless, both providers excel on a functional basis and lead in many of the buying personas for our Q4 2017 SolutionMap.

But are they the right fit for your organization?

Join us as we put on the gloves and pit Coupa and Jaggaer “head-to-head” in the Spend Matters evaluation ring. We’ll start by providing a technology summary comparative rating of each provider and then explore business requirements and scenarios, calling out the winner in each match up. If you’re considering either vendor or other sourcing competitors, look no further for an evaluation and comparison you can’t get anywhere else. This is the first in a series of “head-to-head” evaluations based on our SolutionMap data, and more matchups will follow as additional providers step into the ring and seats to these SolutionMap subscriber-specific events become available (in addition to our usual vendor deep dives on Spend Matters PRO, of course). Stay tuned!

E-Procurement 2018 Trends and Forecast (Part 1: Customers Adoption and Priorities) [PRO]

e-procurement market outlook

You know what they say about predictions? They’re about as common as opinions: everyone has one. This Spend Matters PRO series walks through the trends we are seeing unfold in the market today based on our technology analysis and practitioner research and engagement. So let’s not predict; let’s share and analyze.

Today, we start our 2018 procurement technology trend and forecast series, beginning with customer adoption trends and priorities within the e-procurement market. We’ll explore what customers are valuing most from a selection and deployment perspective in 2018, as well as early trends that are sprouting.

In the second installment of this series, we’ll offer insight into e-procurement technology provider trends and strategies of note, and ask whether these are a good thing for customers (and if not, our recommendations for customers to mitigate risks). We’ll also share our comparative market growth (and sizing) estimates for 2018 compared with last year.

Program Management: The Missing Link in Procurement Technology Modules and Suites (Part 2 — Functional Building Blocks) [PRO]

Program management is an integral component of source-to-pay (S2P) activities that is no longer optional for high-performing procurement organizations. In short, program management is a set of processes that manage specific projects and broader project portfolios that focus on higher-level processes and composite processes that cross the traditional linear flow of sourcing, contracting, purchasing and payments. These programs can be ancillary to core processes (e.g., M&A-related activities or globalization efforts) or transformational in nature to implement enterprise-level programs (e.g., working capital programs, risk programs, sustainability programs, digital programs, ERP upgrade programs, Lean/Six Sigma programs).

The problem is that, generally, program management is poorly automated and stovepiped within functions or subfunctions. Within procurement, there may be savings tracking for strategic sourcing processes displayed in a "CPO dashboard” but not much visibility and collaboration beyond that. This is a problem because as procurement is collaborating with stakeholders on ever broader processes and reaching deeper into stakeholder processes, supplier processes and external customer processes, there needs to be a cross-functional management capability. The emergence of collaboration tools like Slack and others have shown the enterprise desire to manage fast-paced mobile communication on the ground that is tied back to strategic objectives.

This Spend Matters PRO series defines what effective program management capabilities are from a design, platform and functional perspective that puts the user first. We explore both what represents best-in-class program management components today, what users should expect tomorrow and what we hope technology providers have on their roadmaps to build. We also explore some solution building blocks for effective program management, including best-of-breed project management, goal management, program auditing/audit trails and prepackaged initiative enablement. (Don’t forget to read Part 1 of this series to first understand the design principles on which effective program management technology is based.)

How Procurement Can Contribute to Platform Sourcing Initiatives: There Are More Ways Than One (Part 2) [PRO]

As we observed in the Part 1 of this Spend Matters PRO series, five years ago, “online work/services platforms were off the radar for large enterprises and most certainly off the radar for all but a few CW/S procurement organizations. But much has changed since then. Not only has awareness increased significantly but an increasing number of enterprises have piloted or have moved further up the adoption curve. Moreover, traditional staffing-related providers (e.g., MSPs, VMS) have begun to incorporate platform sourcing into their services and technology solution models, creating another way for enterprises to move along an adoption path.

We argued that, in this context, it was not only the time for procurement functions to take platform sourcing initiatives seriously but also to participate in positive ways. To do that, we argued that a different kind of mindset would be required: one where procurement could very well be a member of a team of equals that all had contributions to make to the initiative. In addition, by understanding that most procurement functions may not have the level of resources and maturity to assume a full-time leadership role, we showed how those procurement functions could participate in other ways, allowing them to both move up the learning curve and have an increasingly positive impact on the initiatives.

In Part 2 of this series, we turn our focus to how CW/S procurement can leverage its functional expertise and skills to make specific, concrete contributions to the advancement and success of direct sourcing initiatives. We also discuss how CW/S procurement may change over time to be much better aligned to supporting enterprise needs for new, increasingly digitally enabled sources and forms of work and services beyond the current focus on traditional contingent workforce and SOW management.

How Procurement Can Participate in Platform Sourcing Initiatives: There Are More Ways Than One (Part 1) [PRO]

Today, most contingent workforce and services (CW/S) procurement practitioners have some awareness of — or even some level of interest in — online work/service platforms (e.g., online freelancer marketplaces, contest/challenge crowd platforms, digital direct sourcing solutions). While the integration of these platforms into enterprise systems and processes is still a work in progress, many expect that they will increasingly become an important set of sourcing options in the years to come.

CW/S procurement, though typically time and resource constrained, cannot ignore or rationalize away these developments. On the contrary, the enterprise requires procurement’s involvement and contributions to pursue these new options successfully. But the question of how, when, where and to what extent procurement can or should participate in these new developments can be vexing questions. No doubt, some long-standing assumptions, philosophies and approaches to CW/S procurement may not align with these new sourcing options and opportunities, and adjustments will thus be required. It will also be necessary for procurement to learn about a whole new area of platform-based sourcing and a new landscape of platform suppliers.

In this two-part PRO series, we provide a focus, framework and suggestions to assist CW/S procurement organizations in understanding various options and opportunities for participating in online work and services platform developments/initiatives in their respective enterprises. In Part 1, we focus on (a) how the procurement approach to platform sourcing is different from typical contingent workforce program management and (b) what participation options (roles/orientations) are available to procurement organizations depending upon their state of maturity and resource availability. In Part 2, we discuss a range of procurement functional disciplines that are, with appropriate modification, highly applicable in platform sourcing scenarios. In addition to indicating where procurement can concretely contribute expertise, we also discuss how procurement’s role may change overtime. And, finally, we provide a set of key takeaways from this series.

Program Management: The Missing Link in Procurement Technology Modules and Suites (Part 1 — Design Building Blocks) [PRO]

ux

This Spend Matters PRO series provides insight into what constitutes effective program management capabilities from design, platform and functional perspectives. We explore both what represents best-in-class program management components today and what users should expect tomorrow, including what we hope technology providers have on their roadmaps to build.

Part 1 of this series provides insight into the platform-level building blocks of effective program management capability, exploring user design as a central consideration of an effective system. User experience is critical to the acceptance and adoption of any source-to-pay (S2P) module and suite. Why? Without adoption and acceptance, there are no benefits, and the promised ROI will never materialize if the solution is not adopted by those that need to use it for the platform to work.

But maximizing user adoption is easier said than done. Users want a good experience when interacting with procurement technology. They expect not only the intuitiveness and ease of use of modern web-based platforms that they use to research products and buy in their everyday lives but also an ease of use that actually makes their job easier and more efficient. This is not what one typically achieved from an S2P platform designed in the ERP era, where green-screen workflows were often adapted as is to the GUI interface that came native with the advent of the world wide web.

This is one reason effective program management was rarely adopted, even when featured, in earlier-generation procurement technology solutions. And it’s why we’re going to tackle this subject first as our series begins.

Comparing Jaggaer and BravoSolution: Contract Lifecycle Management [PRO]

contract

Within the procurement technology suite market, acquired contract management solutions have a history of aging more like a Zinfandel or Beaujolais and less like a Cabernet or Merlot. But the greater problem is not how well the grape (or clause library) can stand the test of time; it’s that the best elements of CLM modules do not necessarily “blend” as well as other capabilities in a procurement suite that are easier to integrate or replatform.

One of the challenges is that the requirements to effectively tackle specialized CLM components from a development and innovation standpoint are specific to CLM. Said another way, the economies of scale in development are not the same as say delivering an integrated sourcing and supplier management capability. Another major challenge is that best-of-breed CLM vendors have innovated far more rapidly in recent years by introducing new capabilities.

Within this context, BravoSolution and Jaggaer both present somewhat average CLM capabilities, based on our Q4 2017 SolutionMap results. They are certainly not bad, but neither solution delivers the same capabilities as leading best-of-breed vendors, nor do they stir our enthusiasm the way other areas of each of the providers' suites do.

In this research brief, we answer the following questions:

  • Comparatively, how does each respective CLM module stack up on a capability basis?
  • What are the functional strengths of each supplier management module “under the surface”?
  • What are the “best fit” SolutionMap personas for each CLM module?
  • Who are alternative CLM providers?
  • What are disruptive forces in the CLM market that could affect both providers?
  • Is there a disadvantage to “going non-suite” in the CLM area?
This Spend Matters PRO brief is based on the following inputs: Q4 2017 SolutionMap datasets (analyst scoring) based on our SolutionMap methodology, demonstration notes and Spend Matters PRO research on alternative suppliers (Vendor Snapshots).