Plus or PRO Content

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

Building the Business Case for Managing Suppliers with Technology: 7 ROI Levers (Introduction) [PRO]

If Rodney Dangerfield had ever worked in procurement, he would have been in charge of supplier management. While supplier management does get some respect, the late Dangerfield certainly would have agreed it does not get the respect it deserves.

Part of the challenge in garnering respect for supplier management is that it touches on so many workstreams, processes and business functions. And we’ve got to say, it’s also not as sexy as spend analytics, strategic sourcing, contract management or even spend management. Compounding these challenges is that few procurement, finance and shared services organizations have earnestly attempted to develop a business case and ROI model for investing in supplier management on an end-to-end basis. But trust us: If you do, you’ll run (not walk) to doing it right.

This Spend Matters PRO research series aims to both demystify the business benefits of doing supplier management “right” and help organizations build a business case to invest in supplier management processes, as well as supporting software. It also explores the ROI drivers organizations might consider in creating their own business case for rolling out a supplier management solution or building on investments they’ve already made.

In the first two installments of this series, we introduce the primary ROI levers of supplier management, starting first with those at the front end of the supplier lifecycle that can help with building a business case. Later in the series, we will provide more detailed ROI model inputs and ranges that can be used in building a business case in each of these areas.

Spend Matters PRO clients can also contact their client services representative for an interactive Excel-based ROI model that can serve as the basis for building supplier management business cases.

Tail Spend Management in the Trenches: Lessons Learned and Questions Answered [PRO]

purchasing

Spend Matters recently hosted a webcast exploring how Owens & Minor revamped its tail spend management strategy using Simfoni, a procurement solutions provider with specialized capabilities in this area. This Spend Matters PRO brief shares the detailed learnings — including segmentation approach, KPIs and ROI elements — and Q&A conducted during the session to aid procurement organizations in their own efforts to tame the tail.

(For those who want a full download of the webcast, which features Owens & Minor-specific data and screenshots of Simfoni’s tail spend system, check out the on-demand replay.)

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.

Strategic Technology Planning: A New Imperative for Contingent Workforce and Services Procurement (Part 1) [Plus+]

For many years now, planning for CW/S technology has been largely tactical, focusing almost exclusively on the capabilities and effectiveness of one VMS solution or another. Technology planning at a strategic level has been rare in CW/S procurement functions, in main part because it has not been necessary in a relatively static technology and supply chain environment. Need a core contingent workforce technology to manage processes, compliance, risk and cost? Adopt a VMS (or work through your MSP to get one). Seeking a specialized category solution? Work with the business owner (e.g., legal, telecom, facilities) to engage a vendor that meets everyone’s needs.

But in recent years, many aspects of the environment in which CW/S procurement executes its mission have begun to change significantly. Under these conditions, strategic planning becomes necessary. Because technology is now and will be presenting CW/S procurement functions with new opportunities to add value to their organizations in a variety of ways, allocating time and resources to conducting strategic technology planning is now an imperative. In most cases, this will mean starting from scratch. But foregoing strategic technology planning opens CW/S procurement to missed opportunities, core mission failure and possibly disruption.

In short: procurement, HR and IT organizations — not to mention line of business owners — need to work together to create their own CW/S technology information architecture through a strategic technology planning process. In Part 1 of this series, we build the case for strategic technology planning and provide an overview of what strategic technology planning means for a CW/S procurement function. In Part 2, we flesh out a targeted approach to CW/S procurement strategic technology planning and practical approaches for implementation within an organization.

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.

Recruiting an Executive Search Firm in Procurement: 7 Questions to Ask and Evaluation Criteria [PRO]

interview

Talent makes procurement happen, and executive search firms play a critical role in bringing new talent into organizations. But when it comes to recruiting senior talent, few procurement teams we’ve spoken to take anything but a relationship-driven or ad-hoc approach to selecting executive search firms. The same relationship-based approach is also common with senior HR staff, CFOs and even CEOs, who often lead the selection process with executive search firms when they plan to hire a new chief procurement officer (CPO).

At Spend Matters, we are big believers in evidence-driven approaches to decision-making, as one can see through our SolutionMap methodology. In the case of procurement talent management and recruiting, this often starts with selecting the best possible executive search firm, especially hiring a CPO, VP and director-level talent. We recently assisted in the hiring of an executive search firm, but when tried to find an evidence-driven set of criteria for assessing such firms, we came up short. So we created a model ourselves, following the general theory suggested by Nobel Laureate Daniel Kanheman for optimal firm assessment.

In this Spend Matters PRO research brief, we share our framework for selecting executive search firms that specialize in procurement, using an evidence-driven model to support the best chance for positive outcomes. The frameworks comprises seven RFI questions to ask potential executive recruiting firms, scoring criteria for each question and a scoring matrix.

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. 

Online Work Platforms and Enterprises: Survival of the Fittest or the Fastest? [Plus+]

cheeta

In this Plus research brief, we provide an analysis of the complex dynamics that characterize the online work platform technology market, in particular with respect to large enterprise adoption (or, to date, the lack thereof). We also examine some promising platform strategies/approaches that may promote platform business viability and, over time, more success in achieving large scale enterprise penetration. Finally, we discuss the implications of our analysis for both platform providers and enterprise buyers.

(Note: To avoid possible perception that we are making endorsements or recommendations in this brief, we forego references to specific platforms. Platform providers are evaluated separately, in our Vendor Snapshot and SolutionMap series, with these strategies and approaches in mind.)

HealthTrust: Healthcare GPO Provider Summary — Introduction, Summary Analysis, SWOT and Customer Engagement Tips [PRO]

Through a combination of organic growth industry consolidation, three group purchasing organization (GPO) providers have come to dominate the healthcare market. These providers — Vizient, Premier and HealthTrust — control nearly 75% of spend in the healthcare GPO market. Despite this level of consolidation, the three competitors have, in certain cases, targeted different markets and introduced unique offerings. This Spend Matters PRO research brief provides an overview of HealthTrust, including a general introduction, key points analysis, SWOT framework and customer tips for getting the most out of engagement. For background on the GPO market, check out our two earlier briefs, An Introduction to Group Purchasing Organizations (GPOs) and Group Purchasing Organizations: Supplier Perspectives and the Evolving GPO Landscape. For general context, perspective and analysis of the healthcare GPO market in particular, see our recent three-part series: Part 1 (Background, History and Introduction), Part 2 (GPO criticisms and market consolidation/bifurcation) and Part 3 (Key Takeaways, Emerging Paradigm Shifts and Customer Recommendations).

Premier: Healthcare GPO Provider Summary — Introduction, Summary Analysis, SWOT and Customer Engagement Tips [PRO]

healthcare

Through a combination of organic growth industry consolidation, three group purchasing organization (GPO) providers have come to dominate the healthcare market. These providers — Vizient, Premier and HealthTrust — control nearly 75% of spend in the healthcare GPO market.

Despite this level of consolidation, the three competitors have, in certain cases, targeted different markets and introduced unique offerings. This Spend Matters PRO research brief provides an overview of Premier, including a general introduction, key points analysis, SWOT framework and customer tips for getting the most out of engagement.

For background on the GPO market, check out our two earlier briefs, An Introduction to Group Purchasing Organizations (GPOs) and Group Purchasing Organizations: Supplier Perspectives and the Evolving GPO Landscape. For general context, perspective and analysis of the healthcare GPO market in particular, see our recent three-part series: Part 1 (Background, History and Introduction), Part 2 (GPO criticisms and market consolidation/bifurcation) and Part 3 (Key Takeaways, Emerging Paradigm Shifts and Customer Recommendations).