Trade is Getting Complicated. Trade Agreements More So. Are Your Contracts Up to Snuff?

It’s difficult enough to create contracts that specify what both parties want, but with the shifting global landscape, crumbling trade agreements, new ones rising to take their place, and new regulations cropping up all the time that companies need to adhere to just to do business in their home country, it’s almost impossible.

How do you define contracts that keep up? And, more importantly, how do you figure out which of your contracts are not up to par, and where they are falling short?

In the first case, you constantly monitor government sites, associations, and news sites for mention of new regulations and requirements to adhere to them. Then you process the news, make sense of the new requirements, and find some experts to help you understand the best way to contractually deal with the new rules.

In the second case, you need to be able to quickly analyze a contract and determine if there are clauses to address the regulations. But if it’s a 50 page contract, that’s not a quick effort. And if you have 1,000 of them? 10,000 of them? How can you even attempt to do that?

Manually, you can’t. You need tech that can identify which contracts are likely lacking one or more clauses to address one or more regulations and bring them to your attention, in order of priority. Advanced, semantic, technology that can understand documents, deficiencies, and suggest potential fixes.

And a few companies understand that, and that’s why you see the likes of companies like LawGeex and LegalSifter rising up to challenge Seal with a new take on contract analytics and the need for. Because, one way or another, once you reach a certain point on your sourcing journey, you’re going to need this technology.

One Vendor Won’t Rule Them All … And One Ring Won’t Bind Them!

A common question (from buying organizations and investors alike) these days is which vendor is going to win out in the end? Who will still be around in 5, 10, and 20 years and which horse should take all the bets?

The answer is no single vendor is going to win. And the reason for that is many-fold. One, different types of companies need different types of vendors. That’s why SpendMatters SolutionMaps (where 3.5 of the 4 SPT maps were developed by the doctor) classifies vendors according to six different buying personas. While six personas doesn’t quite cover all the buyers out there, it covers the majority and shows that most vendors don’t do everything well.

Two, different locales around the world have different regulatory and compliance requirements, as well as (culturally) different ways of doing business, and one vendor is not always going to be the right fit, if they are even a fit at all.

Three, different organizations are at different stages on their e-Sourcing journey and need a different amount of complexity — and if they are just beginning, there’s no way they will be able to start with, and adapt to, a complex 42-step sourcing platform designed as a one process fits all. (Yes, those still exist, and they are the reason some organizations are abandoning major players with solutions they’ve invested millions in for mid-market solutions that cost a tenth of the price with a tenth of the functionality.)

As a result, different organizations value different things depending on where they are on their journey. Companies just starting their e-Sourcing journey just want a simple, configurable, workflow that can be configured to minimal requirements. Companies a bit further along want to easily centralize and manage their supplier information. Companies further along want to be able to centralize all their spend and do advanced analytics. (Or vice versa, depending on who whispered in their ear first.) Companies quite advanced on their journey want advanced modelling and optimization capabilities.

In other words, the sourcing platform with the best workflow management solution will be a winner among the newbies. The sourcing platform with the best supplier lifecycle management platform will be a winner among those that need good supply base management. The sourcing platform with the best analytics will be a winner among those that need a good understanding of their spend. And the sourcing platform with the best optimization capability will be a winner among those that need to extensively model and optimize their supply chain.

Just like there are a multitude of winners in real estate who can make money focussing on low rental, suburban housing, condos, high-end mansions, low-end commercial, and high-end commercial, there will be a multitude of winners in the sourcing space. The best in each category — and each persona — will win.

The Days of Black Box Marketing May Soon Be Over!

In what marketing will refer to as the good old days of the Source-to-Pay marketplace, when the space was just emerging and most analysts couldn’t see past the shiny UI to what features were, or more importantly, were NOT, lurking underneath, it was a wild-west, anything goes marketplace.

Marketers could make grandiose claims as to what the platform did and did not do, and if they could give a good (PowerPoint) presentation to the analysts, the analysts would buy it and spread the word, and the story would grow bigger and bigger until it should be seen as crazy and unrealistic, but instead was seen as the new gospel according to the power on high.

Big names would get bigger, pockets would get fatter, but customers would lose out when they needed advanced functionality or configurability that just was not there. On the road-map, maybe, but would it get implemented before the company got acquired by a bigger company, which would halt innovative development dead in its tracks?

But those days, which still exist for some vendors with long-standing relationships with the big name analyst firms, may soon be numbered. Why? Now that SpendMatters is doing SolutionMaps, which are deep dives into well defined functionality, a customer can know for sure whether or not a certain provider has a real solution in the area, how deep it goes, and how it compares to other providers. As a result, the depth of insight that will soon be expected by a customer has been taken up a couple of notches, and any analyst firm and consultancy that doesn’t up the bar, is going to be avoided, left behind.

Once (potential) customers realize the degree of information that is available, and should be available, they’ll never settle for less. And that’s a good thing. Because it means the days of black box marketing will soon be over. While North America may never be a Germany where accurate technical specs lead the way, at least accurate claims will. And every vendor will be pushed to do better.

A Great Day in American Automotive History …

Sixty years ago Today the Ford Motor Company produced it’s 50 millionth automobile the Thunderbird, and fifty years ago today General Motors produced it’s 100 millionth automobile, the Tornado, putting the automobile revolution in full swing and launching the Automotive industry to its height (before their downfall began in the 1970s and 1980s with a series of engineering, manufacturing, and marketing mishaps and disasters, a downfall which continued in the 1990s where the recession resulted in weak auto sales and operating losses). Up until the 1980s, the US was the largest automobile producer in the world until Japan overtook it.

Producing a million units of anything in the 50′s was a feat, especially for something as large and complex as an automobile, and the fact that American companies could do it … and do it well … means that they used to have great supply chain management. Remember, even local and vertically integrated supply chains are still supply chains and this goes to show the value of near-, and home-, sourcing and (deep) control over key aspects of your supply chain.

Significant (non optimization backed) cost savings always comes at a price, and that price is usually an increase in risk. Be careful. Or your company could meet the same fate of the US automotive manufacturers, many of whom had to enter into bankruptcy and receive big bailouts from the government just to stay alive.