Author Archives: Nick Heinzmann



K2 Sourcing: Vendor Introduction, Analysis and SWOT

The history of e-sourcing software stretches back to before the dot-com bubble burst, yet few of the original providers of RFX and auction management tools exist today as they did at their inception.

Some were bought and consolidated into the mega organizations we know today (e.g., SAP Ariba, which acquired FreeMarkets and Procuri), while others have slowly drifted into oblivion (RIP Emptoris). The result is that, with a few notable exceptions, procurement organizations today have few choices for standalone providers of e-sourcing tools.

One of those remaining options is K2 Sourcing, a provider of RFX and auction management software that has quietly served mid-market procurement organizations since 2003. Based in the Milwaukee area, K2 grew out of its founder’s frustrations as a procurement professional with the RFX and reverse auction platforms available then.

The young provider set out with one of the first cloud-based solutions in the space with a goal to “create the fastest, easiest and most transparent method for buyers to screen and select suppliers.” And while a lot has changed in the procurement and technology worlds in the past 16 years, K2 has managed, through a combined offering of subscription software and supporting sourcing services engagements, to build a stable and respectable client base, counting brands as varied as Verifone, Lozier Corp., Big Lots, Milwaukee Tool, Tempur Sealy, Kaiser Permanente and others.

This Spend Matters PRO Vendor Introduction offers a candid take on K2 Sourcing and its capabilities. The brief includes an overview of K2 Sourcing’s offering, a breakdown of what is comparatively good (and not so good) about the solution, a SWOT analysis and a selection requirements checklist for companies that might consider the provider.

Fairmarkit: Vendor Introduction, Analysis and SWOT (Part 2) — Summary and Competitive Analysis

The question of how to manage tail spend is as much a philosophical question as a technical one. There are issues around the thresholds that define tail spend, challenges around rogue spend that creates the long tail and the ultimate decision about who should be responsible for taming the tail.

But for most procurement organizations, the tail spend discussion is left unexplored.

Instead, the status quo way of managing tail spend often reigns. It’s rarely effective, so you’re left with the problems: wasted time by procurement and non-procurement staff, long lists of unknown or untrusted vendors, no clean data or visibility into savings left on the table.

Challenging this status quo is what Fairmarkit, a provider of tail spend management software out of Boston, seeks to do with its RFQ and analytics solutions. But where does Fairmarkit fit compared with other sourcing and tail spend management providers in the procurement technology market, and what are its relative strengths and weaknesses compared with direct and indirect competitors?

This Spend Matters PRO Vendor Introduction offers a candid take on Fairmarkit and its capabilities. Part 1 of this brief provided an overview of Fairmarkit’s offering and a detailed solution tour. Part 2 includes a breakdown of what is comparatively good (and not so good) about the solution, a SWOT analysis and a competitive breakdown of other providers that a procurement organization might consider while evaluating Fairmarkit.

Fairmarkit: Vendor Introduction, Analysis and SWOT (Part 1) — Background and Solution Overview

Tail spend is a growing area of concern for procurement. Given the granular, dispersed and opaque nature of such spend, many organizations find the task of taming the tail daunting.

Purpose-built tools have long existed that adequately address strategic sourcing activities (e-sourcing) and route internal users to pre-approved catalog items (e-procurement), yet technology to support the 20% of spend that is not actively managed by procurement has comparatively lagged.

Instead, the answer for most procurement groups has been to either attack tail spend with a patchwork of variably effective methods (p-cards, marketplaces) or outsource the problem entirely, like to a BPO firm.

Yet neither of these methods is particularly attractive. With the patchwork approach, issues around risk and control are poorly addressed, and while routing purchases under a low threshold (e.g., $500) into a marketplace can satisfy the typical spot buy, this hardly represent a strategy around optimizing tail spend.

BPOs offer expertise and a “set-it-and-forget-it” mentality, but organizations often find that the process efficiencies that they had hoped to gain don’t materialize as promised.

Finding a third way between the patchwork and complete outsourcing is at the heart of how Fairmarkit, an upstart vendor out of Boston, is trying to solve the tail spend management problem.

By using machine learning to analyze purchasing patterns and vendor fit, Fairmarkit automates the RFQ process for variable purchases that fall in the roughly $500 to $250,000 range. In the process, it wants to challenge the status quo for how businesses think about tail spend, enabling procurement groups to automate bidding and analysis on low-value purchases so they can assign team members solely to strategic events. And Fairmarkit already has had success doing so, claiming an average of 6% to 12% cost savings with clients as varied as the Massachusetts Bay Transportation Authority (MBTA), Univision and Yeti.

This Spend Matters PRO Vendor Introduction offers a candid take on Fairmarkit and its capabilities. It includes an overview of Fairmarkit’s offering, a breakdown of what is comparatively good (and not so good) about the solution, a SWOT analysis and a selection requirements checklist for companies that might consider the provider.

Icertis Blockchain Framework: A Glimpse of CLM’s Expanding Footprint into the Supply Chain

blockchain

Icertis recently announced it has developed, in partnership with client Mercedes-Benz, a blockchain framework to address multi-tier supply chain visibility challenges. Called the Icertis Blockchain Framework, the new offering allows companies to deploy a permissioned, standards-based blockchain (using one of the ecosystem standards through Hyperledger) within the core ICM platform on Microsoft Azure, as well as record specific transactions based on rules and metadata. Icertis developed the framework as an initiative within Mercedes-Benz Cars to better enforce requirements for CSR and compliance obligations without compromising contract confidentiality.

A ‘Human Touch’: VectorVMS Talks Rebrand and What the Future Holds

workers

The market for contingent workforce solutions has been evolving rapidly, including a new name for a vendor that has a deep history in the sector. VectorVMS, a Raleigh, North Carolina-based provider of a vendor management system (VMS) solution, recently became its own brand after spinning off from PeopleFluent, which had been Peopleclick. Since “people” are a prominent thread here, we caught up with Marc Husain, the general manager of VectorVMS, for a Q&A on the company's new developments.

Enabling the Living Contract: A Q&A with Icertis’ Co-Founder, CTO Monish Darda

Will procurement settle for merely a digital upgrade to contract management, or will it seize the opportunity to reimagine what contracts can be altogether? As Spend Matters framed it in our previous article in this series, the question comes down to a distinction between “smart” contracts and “live” contracts. To help organizations see the possibilities, we sat down with enterprise CLM provider Icertis’ co-founder and CTO, Monish Darda, for a Q&A exploring the live contracting concept, along with active use cases and a projection of what the future holds for contract management technology.

The Perils of Rogue Spend in Contingent Workforce Management

contingent workforce

Rogue contracting of freelance resources can, with the right supporting technologies, be turned from an operational risk to an attractive business opportunity — to drive savings, reduce compliance risks and provide improved visibility into and intelligent insights about this segment of the workforce to senior leadership. In this article, we examine the drivers and resulting issues of the increasing presence of rogue spend within contingent workforce management programs, and then we explore the opportunities and solutions that businesses can use to address this challenge.

3 Areas Where CSR Risks Hide in Your Indirect Spend (Part 2)

risk

Because procurement is so often measured on cost savings as its primary KPI, another essential factor can be left by the wayside: risk. Especially when it comes to corporate social responsibility (CSR) and sustainability, risk remains hidden within indirect spend. To see how these dangers go unaddressed, here are three areas with examples of where organizations miss — but, with proper tools, can address — CSR and sustainability risks for indirect procurement.

The CPO’s Conundrum (Part 1B): How Outside-In Issues are Shaping the Course of Procurement

As we noted in yesterday’s Spend Matters PRO article, if you were to ask a roomful of CPOs what was their top concern was, for this year or even the coming decade, chances are the majority would lead with cost management and supply assurance. And while this makes sense, supply assurance and cost reduction are just two of a host of broader issues that are being pushed to the front of mind for today’s CPOs. So we are dedicating a series to the broad scope of issues that the modern CPO must face, starting with an overview of how they break out in the common PESTLE framework. Yesterday we addressed the “PES” — Political, Economic and Social — and today we will address the “TLE” — Technological, Legal and Environmental.

The CPO’s Conundrum (Part 1A): How Outside-In Issues Are Shaping the Course of Procurement

If you were to ask a roomful of CPOs what was their top concern was, for this year or even the coming decade, chances are the majority would lead with cost management and supply assurance.

This makes sense. Within the hierarchy of procurement value, providing the right goods and services at the right time and place, preferably at the right (or better) price, constitute a foundation without which organizations cannot function.

Because of this requirement to secure and manage supply markets, procurement’s value proposition to the business is ultimately defined by its ability to access and derive value from markets. This means procurement value, then, is driven heavily from an outside-in perspective. That value starts with assurance of supply, just as top-line growth and brand development are foundational to sales and marketing.

The problem, however, is that supply assurance and cost reduction are just two of a host of broader issues that are being pushed to the front of mind for today’s CPOs. Because the CPO must manage multiple changing supply markets, and because those supply markets are affected by numerous external forces over which the CPO — let alone the business or even some governments — has no ability to influence, the CPO’s agenda is in reality much broader than assuring supply and reducing costs.

This brings us to what we call the CPO’s conundrum: Procurement organizations are primarily measured by the C-suite on supply assurance and cost control, but the agenda that the outside world is setting for the CPO is far bigger than just that. How, then, can procurement leaders meet the agendas recognized and prioritized by management while also addressing the equally (or perhaps more) important agendas of the changing, external supply world?

This Spend Matters PRO series examines the roots and resulting challenges of the CPO’s conundrum. In this brief, the introduction to this series, we discuss the current items on the CPO agenda, as well as the outside-in forces that are most notably butting their way in.

In subsequent installments, we will analyze overarching issues on the new CPO agenda individually, including corporate social responsibility (CSR) and sustainability, digital business strategy, political and economic instability, and regulatory risk.

Outlaw: Vendor Introduction, Analysis and SWOT

When people think contracts, they think lawyers. And when people think lawyers, they think semantics, tedium, inefficiency. It’s no surprise, then, that the contract management process at many businesses is perceived as lawyer-like: slow, plagued by error-prone review processes and more inclined to risk-aversion rather than to embracing the new or innovative. But these flaws are also the result of ill-suited tools to manage contracts.

The dominant preference among business users for applications like Microsoft Word and email for the facilitation of contract authoring, review and negotiation is in no small way a reason why contract management processes can feel so archaic.

These applications are general-purpose tools that fail to address the complexity and the importance of contracts to a business. Yet contract management processes have largely been designed to fit to these tools, rather than the other way around.

Reimagining what the contract management process should be is the approach that Outlaw, a nearly two-year-old vendor based in Brooklyn, New York, has taken to designing its software-as-a-service solution.

The founders, both former consultants, were all too familiar with the headaches of contract drafting and approval, which inspired them to design a new contract solution around how they would want to create, negotiate and sign agreements. In doing so, they hope to bring an outsider’s perspective to contract management, rebuilding the process from the ground up so that it can be easier, faster and more enjoyable.

This Spend Matters PRO Vendor Introduction offers a candid take on Outlaw and its capabilities. The brief includes an overview of Outlaw’s offering, a breakdown of what is comparatively good (and not so good) about the solution, a SWOT analysis and a selection requirements checklist for companies that might consider the provider.

Live Contracts: How Next-Gen CLM Solutions Will Make Contracts More Than Merely ‘Smart’

Enterprise contract management has become one of the hottest areas for digital investment, and rightly so. Because contracts form the foundational system of record for all commercial relationships, it stands to reason that, as business becomes increasingly digital, the foundation must also become digital to keep up.

Yet as companies move from storing contracts in filing cabinets to dedicated contract management software, another question arises: What next?

The advent of artificial intelligence-based technology offerings has promised procurement organizations an era of automated, “smart” contracts that execute predetermined actions when specified conditions are met. Such functionality is attractive, to be sure, but the scope of the smart contract concept is also inherently limiting.

To attain the true benefits that digital transformation is bringing to contract management, procurement organizations must go beyond simply making their contracts smart. Instead, they should strive for a more powerful paradigm: “live” contracts that convert their documents into living, adaptable tools for transaction acceleration, risk management and value creation.