There are Three Primary Parts to Procurement Orchestration

Procurement Orchestration is the craze, presumably because Procurement shouldn’t operate in a vacuum. There are a number of startups just focussed on orchestration, a number of analyst firms are jumping on the orchestration bandwagon, and a number of enterprise automation platforms are all of a sudden claiming to be procurement orchestration platforms to get in on the buzz. But there’s a lot more to Procurement Orchestration than just application automation. A lot more.

Procurement Orchestration, which we included in our 39 Part Series to Help You Figure Out Where to Start with Source-to-Pay in Parts 34 to 36 and 39, MUST Address, at a minimum, the orchestration of:

  • procurement data
  • procurement process
  • procurement stakeholders

First of all, good Procurement needs to be data-informed. (Not data driven, data informed. Data driven means that all decisions based on the available data, which is never complete. You can accurately capture all bids in an RFP, previous OTD metrics, previous defect metrics, subjective quality ratings, ESG data, etc. but you can’t capture relationship data, innovation support, etc. and these are also factors that are important in Sourcing and Supplier Selection.) This means that all available data needs to available to the Procurement team. It doesn’t have to be centralized in one system or pushed to a data warehouse / lake / lakehouse, but the source system (that holds the golden record of truth) for every piece of data needs to be identified and integrations created to allow the necessary data to be accessed as needed by the Procurement system currently being used.

Secondly, good Procurement needs proper processes. That’s more than just application orchestration as not all Procurement teams will have applications for every step of the process, and even those that have major applications for every major stage (intake / need identification, spend analysis / opportunity / procurement process identification, sourcing, supplier onboarding / management, contract negotiation and governance, e-Procurement/PO Generation and Management, Invoice Management and OK-to-Pay) will still need to orchestrate intermediate process steps such as stakeholder collaboration, external vendor risk/ESG review, etc.

Thirdly, good Procurement needs to involve all of the relevant stakeholders. The category manager, the risk manager, the budget holder / executive, the in house counsel, etc. All of these individuals need to be able to interact with the procurement process and artifacts at the right time, and through their applications if they have special tools to do the risk analysis, budget analysis, contract review, etc. Thus, supporting procurement goes beyond just supporting procurement applications and processes, but peripheral applications and processes as well so that all stakeholders can be part of the process and effectively contribute their expertise and experience.

Remember this the next time a jazzy tool tries to lure you in with pre-built Procurement platform integrations or easy, visual, procurement workflows. That’s just part of the puzzle.

Simfoni: Bringing the Orchestra to e-Sourcing

As noted in our last article on how Simfoni is Ascending the Scales in Spend Analysis, we last covered EC Sourcing (which is the foundation of Simfoni’s optimization-backed Source to Contract capability that resulted from their acquisition of EC Sourcing in 2022) on Sourcing Innovation in 2016 (getting ready to take the mid-market by storm), and more recently co-covered them on Spend Matters in a 3-part Vendor Analysis in 2022 (Part I, Part II, and Part III), but, as previously noted, you will need a Spend Matters Content Hub subscription to access that coverage.

Those who have been keeping up will know that Simfoni eSourcing has:

  • Flexible Multi-Round RFX Capability with composable questionnaires powered by conditional logic, unlimited user-defined columns, and multiple scoring options
  • Standard Auctions with enhanced lot management
  • Powerful in-tool pivotable matrix reporting so you don’t have to jump out to the analytics module to slice, dice, and compare RFX responses
  • Supplier Information Management with automatic supplier selection in events based on the products or tags
  • Supplier Portal with self-registration, onboarding, and corrective action support
  • Item Management which allows RFXs to be quickly constructed from scratch on existing items, or as copies of prior RFXs where items can easily be added or removed
  • Strategic Sourcing Decision Optimization with flexible scenario creation
  • Basic Sourcing Project Workflows that can be customized for every project
  • Contract Management with user-definable metadata, complete change history, approval workflows, and push from sourcing

Since their last major coverage over two years ago, Simfoni has integrated the EC Sourcing functionality into their platform and added the following capabilities:

  • Intake Management
  • Enhanced Project Management (Dashboard)
  • Integrated Opportunity Assessments and Wave Plans
  • Optimization Simplification

Intake Management

The buzzwords-du-jour are intake and orchestrate, and Simfoni has heard the message loud and clear. While their solution may not be on par with the big names like Zip for intake, it serves its purpose and intake alone is not a solution — you need powerful platforms for sourcing and procurement to back it up. Their solution allows anyone to make a Procurement request, and then view the status of that request at any time. It’s simple, but if you refer back to our post on Investigating Intake – Diving Into the Details, which was Part 37 of our Source-to-Pay+ is Extensive series, we only had six core requirements for intake for the requester:

  • Request portal: minimal, but check
  • Process visibility: minimal, but check
  • Asynchronous messaging: included in the Simfoni eSourcing foundation and available once the project kicks off
  • S2P platform integration: check
  • Budget tracking: available in the Sourcing Project and the Simfoni Analytics platform
  • Alerting: part of Simfoni eSourcing, and active once a project starts (as long as the requester is properly setup on the platform)

… and we only had six core requirements for the procurement buyer:

  • Request to process: Simfoni eSourcing has a good workflow, and it’s a single click to kick of a workflow
  • Workflow process definition: similar to above, it’s solid
  • Integrated approval workflows: not so much in sourcing, but in contracting and procurement (which will not be covered in this article)
  • Project management integration: sourcing projects are very well managed
  • Policy tracking: policies can be integrated across the Simfoni platform and quick links maintained in a policy widget on the main Terminal dashboard
  • Alerting: this is quite good for the buyer

Enhanced Project / Pipeline Management

The new dashboard for sourcing pipeline management hits the nail on the head. A buyer quickly sees all their open projects and their current stage, the baseline spend, budgeted savings, forecasted savings, and actual savings to date — and the CPO can log in and see the current status of everything at any time. No more “can you get me an update by Friday”. This information is always readily available.

Plus, with a single click, you can get the Kanban view and see which projects are in the:

  • Definition stage
  • Sourcing strategy definition stage: which allows for a task-based breakdown
  • Tender / RFQ / Auction stage
  • Negotiation and awarding stage
  • Implementation stage
  • Project close-out stage

Integrated Opportunity Assessments and Wave Plans

As we noted in yesterday’s article, Simfoni has created a great centralized opportunity assessment dashboard, with deep drill down capability, where a buyer can identify which sourcing project can be launched next and then kick off a project using the enhanced project creation capability and cross-platform integration. In addition, you can see each project in an integrated calendar view and know exactly how much is planned across the sourcing department at any time.

Optimization Simplification

Simfoni has extensively worked on simplifying the optimization interface making it super easy to set up a number of baseline scenarios (least cost, X suppliers, incumbents only), create a new scenario as a copy of an existing scenario with just one new constraint, see the spend summaries, and see summaries in pre-defined tabular views.

It’s also super easy to create constraints, which fall into one of six categories:

  • Competition: how many bidders can receive an award
  • Bidder: min or max award volumes to specific bidders
  • Qualitative: limit awards to bidders with custom attributes
  • Quantitative: limit awards to bidders with min or max scores (for risk, etc.)
  • Discount: define tiered bidder discounts (as percentages)
  • Subset: work on a subset of data

Creating a constraint is easy — you simply define

  1. the scope (which can be on any defined entity that is available including, but not limited to item, business unit, plant location, category, etc.) Note that if you want to apply a constraint to a group of items, plants, categories, locations, etc. then you need to define these as part of the sourcing event
  2. the bidder the constraint is applied to (if necessary, not all constraints are bidder-based), and
  3. the parameters (min, max, field value, etc.).

Also, you can create multiple constraints of the same type on the selected constraint screen (if you wanted an approximate 50, 30, 20 split, for example, you’d define three instances of the constraint, with the first instance awarding between 49% and 51%, the second awarding between 29% and 31%, and the third awarding between 19% and 21%).

In other words, in addition to integrating the EC Sourcing platform into their ecosystem, which included massive UX updates for consistence and modernization, Simfoni has continued to extend the capability and it’s still a solution that should be on the consideration list for any organization looking for S2C, especially where optimization or leading analytics is required.

Simfoni – Ascending the Scales in Spend Analysis

Simfoni has matured and progressed quite a bit since we last covered them on Sourcing Innovation back in 2017 (in our article that discussed when a quartet’s not enough), and has even progressed since the doctor last co-covered them on Spend Matters in early 2022 (although the site revamp has conveniently erased his author credit from many of the series he co-authored) in their most recent 3-part vendor analysis (Part I, Part II, and Part III). (Note that a Spend Matters ContentHub subscription will be required to view this three-part series.)

Since the early days, when Simfoni was essentially a spend analytics solution built on Microsoft Power BI with some roll-your own customized spend analytics capabilities embedded with spend analytics process expertise, they have added quite a lot of capability on top, including both out-of-the-box and some DiY (do it yourself) analyses as well as:

  • Extensive out-of-the-box opportunity assessments
  • Impact assessments regarding GHG, ESG, and CSR elements
  • Self-serve classification and taxonomy management
  • Advanced dashboards and custom data analysis
  • Sourcing pipeline management
  • S2C (Source-to-Contract) capability accelerated through its EC Sourcing Group acquisition, including the following:
    • Self-Source/Full e-RFX (RFI, RFP, RFQ, etc.)
    • Supplier Management
    • Contract Management
  • Workflow Routing & Enablement
  • Catalog Management & Creation
  • BuyDesk & Global Sourcing Support
  • Invoice Management
  • Performance Management & Savings Tracking

In this update, we’re going to focus on Simfoni Spend Analytics. We’ll cover their S2C capability (which we last covered in 2016 in our post on how EC Sourcing was getting ready to take the mid-market by storm, and the doctor last co-covered on Spend Matters in 2021 on their 3-part vendor analysis: Part I, Part II, and Part III), in a later update. Note that we will not be covering their Global BuyDesk, their back-office GPO / Procurement-as-a-Service offering, or their Tail Spend Management Services as we focus on technology products only in this blog. But if you’re short on Procurement People Power or Category Competence, we do suggest checking these offerings out. After all, there are advantages to using the same provider for software and services, especially considering the breadth of their platform which provides a complete history and additional advantages once you’re ready to take over self-sourcing and make procurement personal.

The first screen you see in Simfoni Analytics is the “Terminal” which is the cross-application dashboard that front-ends the analytics solution providing a jumping point into key metrics and insights from each module of the full Simfoni platform, including analytics, sourcing, supplier management, and contracts. The Terminal is configurable, with several pre-built out-of-the-box widgets to choose from, which can even include currency trends / heat maps, quick links into key parts of the platform, and even (third party) content feeds.

From the Terminal, the most common jumping point will be Analytics, which has its own landing page that provides the entry point for all of the built-in dashboards which include:

  • Insights: spend summary for the current month vs the prior month, and the same month one year ago (in terms of spend, transactions, suppliers, and other key data points)
  • Spend: classic spend summary (total suppliers, transactions, POs, categories, suppliers, business units, trends, etc.)
  • Geo Mapping: spend breakdowns by regions / countries (and visual bubble map overlays)
  • Trend Analysis: insight into spend trends by supplier, category, region, etc.
  • Category Console: spend breakdowns by category and segmentation by value bracket
  • Spend Distribution: taxonometric breakdowns
  • Commonality Analysis: supplier by count of entity analysis and associated spend
  • Supplier Normalization: suppliers by duplicate count / familying opportunity and impacted spend
  • Supplier Spend Profiles: spend analysis dashboard restricted to a single supplier, possibly augmented with risk, impact, or other customized insight
  • Tail Spend: a spend dashboard limited to, and customized on, tail spend including breakdowns by invoice groupings, vendor groupings, and transaction groupings for insights into spend type (contract/non contract, direct/indirect), variance, and transaction cost

and may also include:

  • Supplier Risk: a risk dashboard based upon integrated third-party risk data feeds (from Darkbeam, out-of-the-box with subscription, or bring your own subscriptions like BVD or Ecovadis)
  • Spend Impact: the impact of your organizational spend from an environmental or social perspective, provided you have the appropriate data feeds for the necessary calculations;
  • M&A Analysis: a specialized dashboard that allows you to compare spend between two entities and do an opportunity analysis
  • Custom Insights: a dashboard custom built for very specific needs unique to your organization

In addition to these analytical dashboards that provide deep insights out of the box, the platform also has some optimizer dashboards that include:

  • Opportunity Assessment where they use the results of all their analysis above to indicate top opportunities across supplier consolidation, one-time vendor elimination, supplier normalization, production commonality, catalogue buying (vs off-catalog purchases), PPV (purchase price variance), payment terms, and other actions (based upon a custom analysis they build for you upon implementation)
  • Supplier Consolidation opportunities by bottom level category as well as projected savings (and savings range) from consolidation to the lowest cost product
  • Purchase Price Variance by product along with savings potential by item
  • P-Card centric tail spend dashboards with spend, transaction, category, supplier, user, facility, etc. breakdowns for deep insight so that what happens on the P-Card doesn’t stay on the P-Card
  • Payment Terms analysis and impact from payment term alterations

And, since the early days, they have added a lot of self-serve data management capabilities including:

  • Category Management where you can define your categories (in a taxonomy)
  • Material Description Management where you can define standard material descriptions
  • GL Description Management where you define GL codes
  • Supplier Management where you manage supplier groupings (families)
  • Transaction Management where you can drill down to the transaction level and get full details and perform transaction-level mappings
  • Taxonomy Suggestions where new classification or change requests are tracked
  • Manual Classification where you can classify by supplier, description, material, and/or GL Description and where you can see the % of currently classified transactions, suppliers, and spend

Simfoni’s Spend Analytics capabilities are quite extensive, informative, and best of all, easy-to-use. If you’re looking for a best-of-breed spend analytics solution from a mini-suite vendor that also has strong procurement services, Simfoni is a vendor you should definitely check out.

There are NO Perils of Big Data in Procurement!

First of all, no organization has enough data, and those that come close don’t have big data.

Secondly, the more data you have, the better.

Third, if you think you have too much data, you’re not getting it!

So where’s this rant coming from? The rant-inducing headline du jour. The CIO Review recently published an article on The Perils of Big Data in Procurement which is complete non-sense, as there are no perils to having more data (because there’s never enough), unless it’s bad data (but the assumption in the article was that all the data was correct), just perils in terms of how that data is presented and accessed.

The perils in terms of how that data is presented and accessed can be significant, but that’s not due to having big data, that is due to poor system design — and that’s a different issue!

According to the article, buyers and procurement managers … have available a huge and unprecedented amount of data … [and] start to measure everything in order to manage it and that with this approach, several data lakes are created, feeding various dashboards, scorecards, reports, and metrics as procurement professionals try to understand spend analysis, price trends, market fluctuations, volume, cost savings, negotiation performance, and other essential factors. And this is true.

It goes on to say it is very easy for a person to be lost in the sea of numbers and details and miss the big picture entirely because you don’t know what is the crucial data that would give you critical insights. And if that wasn’t enough, it goes on to say it is the same as someone that enters the hospital with a broken leg but has everything else checked. WTF?

This is so dumb it makes you angry!

  1. If a person gets lost in the sea of details and numbers it’s because they don’t know what they should be looking for and how they should be looking for it, not because there’s too much data.
  2. If they don’t know what is crucial, it’s because they don’t know enough about the project they are doing to identify what’s critical and what’s not.
  3. What health practitioner is going to be so stupid as to not see a broken leg on a triage? Come on now! And what Procurement practitioner would check all but one dashboard randomly and then not check the last remaining dashboard? (And that’s what the article is implying with its ridiculous statement.)

In other words, the headline, and claim, is bullcr@p. Don’t blame a mountain of data for a lack of capability in your people, poor vendor technology choices (that bury you in useless dashboards), and your unwillingness to train your talent in modern technology and best practices so they can do their job properly.

And while the author is completely right in that you need to

  • understand what matters
  • start with a top-down view
  • have people who are good at interpreting the data

It still misses the point in that you need to, for any application you buy and any project you wish to undertake

  • define what’s relevant up front
  • find a solution that is configured/configurable to show that up front
  • make sure the data is easy to interpret, is accompanied with written guidance, and that your talent is trained on how to properly interpret the data and
  • if the goal is opportunity finding, the solution needs to identify and present the top opportunities across all of the analysis done, with deep supporting dashboards buried under the high level summary dashboard

More data is always better, especially if you want to use machine learning. In other words, it’s not the data, it’s the application, or the people, so don’t blame the data for your organization’s shortcomings.

Can the UK Help American Manufacturers Shift Their Sourcing of Critical Materials?

Maybe, but not in the way this recent article in SupplyChainBrain suggests. The article, which really had the doctor scratching his head, referenced the Atlantic Declaration and how the United States and United Kingdom are resolving to build resilient, diversified, and secure supply chains and, more specifically, bolster the U.K. as a source of five critical minerals: cobalt, graphite, lithium, manganese, and nickel.

While we need a secure supply of these minerals in the Americas to ramp up and sustain EV (Electrical Vehicle) production, as the article also notes, the UK is the world’s 12th largest exporter of cobalt, 16th largest of graphite, 12th largest of manganese, 11th largest of raw nickel, and doesn’t even make the charts on Lithium. It can ramp up all it wants, these numbers aren’t going to change (because every other country is ramping up too), and the bigger countries (likely) have deeper reserves.

Plus, the UK, with very dense cities like London and limited land mass, is in desperate need of EVs itself to keep its smog levels down, so how much can it really afford to export?

The reality is that the UK can help by working with the US to identify non-China sources of these materials, use their collective bargaining might to secure supply at a sustainable cost, and help manage suppliers who are closer to / more used to working with the UK than the US. Similarly, since the UK is a small island and will likely need to import these vehicles (since the local market size doesn’t make an automotive production plant an economical investment for most automotive brands UNLESS a significant part of the UK market would switch to that vehicle), it can also guarantee a market for any suppliers that it secures those materials on behalf of.

Plus, if UK and US companies team up, they can split the effort and share their knowledge and best practices, and the more creativity you have to solve the upcoming challenges, the better — and chances are that the UK, who no longer have the weight and support of the EU backing them up, needs to be very creative these days.

Anyway, while we applaud the joint effort, it’s doubtful that the UK is going to solve even a fraction of the US need raw material wise. But human capital wise, they are even more incentivized than the US to solve these challenges.