Monthly Archives: August 2024

Advice For Dealing With The PROCUREMENT STINK from Leading Consultants!

Last week, the doctor asked fellow niche/independent consultants as to how we can help to dispel the PROCUREMENT STINK which is permeating the space as a result of poor choices, bad information, and sometimes bad actors, which include the reasons we described in that article as well as many more.

Why? Because it’s going to take a collective effort among analysts, consultants, and vendors to dispel the stink permeating the Procurement space, and no one on his or her own will have all the solutions. As expected, some of the greats chimed in with their thoughts and ideas and these thoughts and ideas need to be given center stage, so this is what we’re going to do today!

James Meads

Clarity and transparency on your business model is key, especially if you have revenue streams from solution providers.

As Patrick Van Osta echoed in the comments, the uphill path to recovery, I feel, is for consultants to reclaim the position of sole trusted advisor, and there’s no way we’re ever going to be trusted advisors if we are not clear and transparent in our operations and goals. If we’re hiding our intentions, or upsides, how will the client know whether or not our goals actually align with theirs?

Joël Collin-Demers

I’m 100% on-board with the need for transparency and taking decisions based on what’s best for the client long term. Your job is to make yourself redundant as soon as possible!

In Procurement, there’s always another project. ALWAYS. You don’t have to milk one for life, with your help and guidance, you can open the client’s eyes as to not only how much there is to do, but how much they can do better, for a great ROI, with your help. Just like there’s well over 25,000 (or 35,000) species of fish in the sea, there are tens of thousands of unique aspects to Procurement in a modern enterprise. And just like you have to know where to fish, what hook to use, and what bait to use to catch a type of fish, you need to know the equivalents for each category, methodology, and process.

Jon W. Hansen

Practitioners stop looking at technology as the “silver bullet” solution but instead focus on doing the real and hard work while Solution providers stop selling shiny paper and “falling in love” with your own technology. … and us consultants have to help the practitioners do the work, understand what they need, and steer clear of the vendor with the shiny new tech (that doesn’t actually do anything [more than cheaper, proven tech]).

Paul Martyn

Consultancies (and their clients) need to Provide performance based compensation with uniqueness. For example, provide specialist consultants with compensation that includes equity. In short, align compensation to customer value (revenue growth and retention). Because, right now, most of the good consultants that can generate the ROI a client should expect are not incentivized to do well on point-based projects (like an Affordable RFP), but instead are incentivized to work on, and sell, long-term “solution” oriented consulting that lines the firm’s (and not the clients’) pocketbook (i.e. keep doing the fishing vs. teaching the client). As a result, most of the good consultants move out of the roles they are needed in to the roles they are incentivized to take.

Vinnie Mirchandani

The web lulled a number of procurement (and IT) folks into expecting vendor, negotiation etc intelligence for cheap, if not free. Vendors are not afraid to spend on sales and marketing. Procurement needs to adopt a similar mindset to even the game.

The best things in life may be free, but the best things in business are not. (As the Arrogant Worms pointed out over three decades ago, you get NOTHING FOR NOTHING!) And if you don’t have the right tools that enable the right processes powered by the right intelligence, you’re not going to win the game. Remember that all of the best sports teams use high-tech sports tech backed by science and data analytics to help their athletes reach peak condition. Raw talent only gets you in the game. You need the right training to win, or, at least, the right guidance and tech to enable you as you learn.

There’s a lot of STINK out there now, but if you follow this advice, you’ll go a long way to removing it. After all, you can’t solve everything with a pressure washer.

PaymentWorks: Vendor Onboarding for Payment Assurance!

Founded over a decade ago in 2013, PaymentWorks is still a relatively unknown player in the Source-to-Pay space and the Supplier Management (and more exactly, Supplier Assurance) space in particular. Founded to solve a particular problem in the financial services industry (namely, ensuring the supplier is who they say they are; is not sanctioned, debarred, uninsured, or non-compliant; and the accounts they give you do belong to them), they have found their niche in the mid-market in any services or indirect industry where supplier assurance is key to supplier selection, onboarding, award, and payment.

In the average mid-sized organization, the average Procurement team spends too much time finding vendors, verifying their validity, verifying they aren’t on a prohibited list, onboarding them, maintaining their information, and constantly answering questions from the employee that wants the vendor onboarded, the vendor, and managers on both sides as to where Procurement is in the process. All of this takes time, a lot of time, and, sometimes, so much time that shortcuts need to be taken to meet deadlines and key information is missed, verifications are not done, and, sometimes, fraudulent invoices and payment instructions slip through.

And this doesn’t even consider the data management issues when supplier-related data is stored in the ERP, the procurement platform, the accounts payable platform, the compliance platform, and nothing is ever synched. The data nightmares compound problems, compound risk, and compound loss. Much of it is preventable, with the right data, processes, and verifications.

PaymentWorks was founded to be the digital supplier platform for organizational vendor master data management in a manner that ensured that supplier data was always complete, accurate, and verified before any supplier selection, award, order, or payment was made. And that’s what they’ve built, for the mid-market. And while there are a number of modern onboarding solutions that solve the data management nightmare, there are few that do critical verifications still, fewer still that do bank verifications, and almost none that do indemnifications against ACH fraud risk. (In fact, among the 100+ Supplier Information Management players, the only real competitive technology capability in this aspect is Apex Analytix, but their focus is entirely on the Large Enterprise [and not the mid-market].) And we haven’t even mentioned the fact that they actually understand the vendor side. But we’ll get to that.

The Buying Organization

The PaymentWorks platform sits in front of the ERP (or another back-office system that serves as the back-office system of record if it’s not the ERP), and works by intercepting all data requests (pulls) and data updates (pushes) and ensuring that the data retrieved is authorized and up to date and the data pushes are always verified. It also handles the synchronizations between the ERP and all of the systems that handle supplier data. And, of course, it has a fully fleshed out portal that enables the administrators, the buyers, and the organizational employees who need to interact with the vendor and/or purchase their products or services.

The platform has five main components:

  • Vendor Master
  • Supplier Portal Management
  • Messaging
  • Reporting
  • Payment Process Management

Vendor Master

The platform collects four main categories of information:

  1. Business and Tax Information: contains business name, tax and registry identifiers, and related information — the baseline is common to all client organizations and clients can add additional configurable fields
  2. Addresses and Contact Information: HQ office and primary contacts, common to all client installations, and additional address and contacts as desired by the client
  3. Banking and Payment Information: bank account information, which can be tokenized for security, preferred payment method, and any additional (security) fields the client wants
  4. Additional Compliance Information: any insurance, compliance, diversity, and related information desired by the client, configured on a client by client basis

When a supplier enters this area of the application, they see a dashboard which displays the status of all vendors (along with a visual progress bar) that can be quick filtered on key fields in the side bar. They can select any visual display to drill into a vendor, or search for a vendor to drill into. They can also upload supplier files from the ERP, and this data is used to alert the buyer if the information on a form conflicts with any data in their ERP. The buyer can then choose to reject the form/supplier (if they determine it is a fraudulent submission), override the information in the ERP (if the ERP info is wrong), amend the information (if the ERP information is partially right), add a parent/child relationship (if the supplier is a child organization), or add a new record (and possibly archive or delete the old one). (They can also configure the invoice file processing rules for invoice status files they will be pushing to the platform from the AP system.)

From here, the client can also access, review, pause (for more information), accept, or reject any and all registrations and updates to all vendor information. (Rejection can be final rejection or temporary, returning the registration to the vendor for updated information.) For each vendor, they can access the organizational status of the vendor (onboarding, approved, banned, etc.) at all times as well as the status of all information. They can also quickly jump to associated invoice and payment information tracked by the system (from P2P / AP pushes).

The key aspect of the vendor profile management is the automatic validation of business and banking information and the automatic search against all relevant sanction/debarment lists. In addition, the platform can collect compliance and diversity certificates, appropriate metadata, and configure rules for notification upon impending expiry. Not only are all of these validations automatic, but the platform will immediately inform you if key information is missing or in an invalid format, and if it’s verified or unverifiable (and likely invalid) if in an incorrect format.

A powerful feature of the platform for US clients is that it can auto-generate W-X forms for vendors required by the client organization, and save the vendor a lot of manual effort.

Supplier Portal Management

This is where the administrator can control the optional information collected during the supplier onboarding (core information common to all vendors is always collected and cannot be changed), and buyers can invite new vendors for onboarding, that get their own custom invite link and custom sub-portal. (Yes, sub-portal — each vendor on the PaymentWorks platform has a single portal where they provide the information common to all buyers they interact with, and sub-portals where they specify the custom information requested by each client and interact with that client — more in the vendor section.)

Messaging

This is where the buying organization can communicate with a vendor securely and all messages are logged, secure, searchable, and auditable as they are unalterable once logged.

Reporting

The platform comes with about two dozen built-in reports that can be selected from the reporting screen. These reports include, among others:

  • Uploaded Suppliers Report (which suppliers uploaded from the ERP were found in the existing network)
  • (Vendor) Invitation Approval Audit Report (all invitations and associated status info)
  • Returned Registrations Report (all vendors who have had their submission returned, for what reason, and how many times)
  • Registration Approval Audit Report (all decisions and by who)
  • Vendor Onboarding Report (all records and status)
  • Custom Field Report (custom information collection)
  • Payer User Role (for all users)
  • Delivered Payment Reports (all data from P[ayment]I[nstruction]F[ile]s sent to the bank)
  • etc.

And all can be fully filtered on every reporting dimension. These reports are in addition to (custom) dashboards that can overview information of interest (for the specific client organization) at a glance.

Payment Process Management

The platform, which accepts invoice status and payment record pushes from ERP systems, tracks all invoice and payment statuses, pushes those to the relevant vendors, and allows a buyer to quickly determine the status of an invoice or payment. Once verified, it will also push PIFs to the bank.

The platform supports virtual cards, ACH, accelerated ACH (early payment discounts), and checks and can verify domestic bank accounts accordingly. In addition, as mentioned before, they can tokenize/mask the bank account information and make it so that all the buyers see are the tokens while the actual bank account information is securely stored only on their systems (and capable of being unmasked only by an authorized administrator) to heighten payment security and help the organization prevent internal / collusion fraud. Finally, if the client uses their system with the appropriate security protocols in place (such as tokenization), they will indemnify the client against domestic ACH fraud as they stand behind their verifications and security.

The Vendor Portal

As mentioned above, a really cool feature about the PaymentWorks platform is they get it right and a supplier only has to register on the platform once, only ever has to remember the login for, and access, one portal, and onboarding for a new client is limited to additional non-common information required by that client. But let’s step back a bit.

The first time a brand new supplier is invited by any client of the PaymentWorks platform, they ware walked through the onboarding process in a guided step-by-step manner that asks them questions about their business type, locations, banking, insurance, and diversity information in a manner that ensures they are only asked to provide the appropriate, relevant, information to their business type. (For example, businesses need different information for corporations and for individual / sole proprietorships.) Mandatory and optional fields are clearly delineated, formats clarified, and key identifying information confirmed.

Once they are onboarded by at least one client, they gain full access to their vendor portal where they can see all of their customers, and click into each to see information specific to that customer or complete a registration process or update. They can also see all of the invoice status information provided to them by their customers, all of the remittances made by the customer along with correlation of those remittances to their individual invoices, any messages from their customers, their core profile business & banking information (which they can submit updates to, which will be verified by PaymentWorks before they will be allowed), and any relevant PaymentsWorks news or updates.

Validations

As indicated above, a key capability of the platform is all of the automatic validations designed to ensure all relevant supplier business, compliance, and payment data is valid at all times. These include, but are not limited to:

  • IRS TinCheck (provided tax id matches provided legal name)
  • StreetySmarts USPS address validation (real address that can accept mail)
  • Early Warning System + Proprietary PaymentWorks banking verifications combined (account is owned by the tax id you intend to pay via EWS); for those bank accounts not covered by EWS, the PaymentWorks platform assesses risk and will verify (or not) based on our data.
  • Choice of more than 800 federal and state sanctions lists to continuously monitor, including OFAC, Sam.gov, debarment, etc.

If you want to know whether a specific list is monitored, or can be integrated, or want more details on the integrated lists and verifications, PaymentWorks will be happy to provide this information to you. Simply reach out directly.

Summary

PaymentWorks is a relatively unique Supplier Management offering in the compliance and payment verification space whose only competitor you would have heard of is Apex Analytix (a heavyweight with the price tag to match), and the only platform of its kind designed with a focus on the vastly underserved mid-market in entity verification, banking verification, and vendor compliance. And while we’ve covered a few good providers as of late for vendor diversity / compliance in general in the mid-market, if your organization’s greatest need is verification and compliance around business legitimacy and payments, then PaymentWorks is a vendor that should definitely be on your shortlist. This also holds true if you are a large enterprise with a good supplier management solution in place as part of your Source-to-Pay suite that doesn’t do these compliance verifications, as it can be easily plugged in (since it sits on top of the ERP and can intercept all the relevant traffic) to allow Finance and Risk to do compliant on-boardings and key profile maintenance, and then all of the day to day supplier performance/[other] compliance/risk/development management can be done in your existing solutions.

Proper Project Planning is Key to Procurement Project Prosperity! Part 2

In Part 1 we noted that we wrote about the importance of Project Assurance, and how it was a methodology for keeping your Supply Management Project on Track, ten years ago and that this typically ignored area of project management is becoming more important than ever. Given that the procurement technology failure rate, as well as the technology failure rate as a whole, hasn’t improved in the last decade, and is still as high as 80% (or more) depending on the study you select, that’s a problem. Especially when, for many companies, theses projects typically start in the million dollar range. (Even if the annual license is only 100K, by the time you multiply that by 3, the minimum term any vendor will give you, the annual maintenance fee by 3, and then add the implementation, integration, training, and ongoing integration maintenance costs and ongoing training costs, it’s well over 1M.)

But we also noted whereas there might have been a time when this was enough to tip the odds of success in your favour, it’s not quite enough anymore. Given the complexity of modern procurement (which hasn’t had as many complex problems to deal with simultaneously in over two decades) and modern technology (which is now AI enabled, AI backed, AI powered, AI enhanced, and or AI driven, even if it isn’t), when most organizational users are still struggling with basic technology (not enabled, backed, powered, enhanced, or driven by [fake] AI bullcr@p).

We told you we were going to dig into the project steps and help you understand what you need to do to get it as right as you can and greatly increase your odds of success. But first, there is one critical action you need to make that is common to all steps that is critical for your Procurement Project Prosperity and that is:

  • Engage an independent expert to guide you through the entire process and help where needed, including assurance.

As noted, this individual

  • cannot be an internal resource, even from a different department, as they are still subject to the internal pressures from the C-Suite (fast, cheap, etc.) that might be counter-productive to project success (that is critical for eventually obtaining the ROI you purchased the platform for in the first place)
  • cannot be a vendor representative as their only goal is to get you to buy more, or at least keep your subscription at the initial purchase level (which likely contained seats you never used, SKUs you don’t use enough to justify, and third party feeds/integrations you aren’t taking advantage of)
  • cannot be an implementation team representative, even if they are a third party consultancy, as the odds are that consultancy has a preferred partnership with the vendor and will be biased towards keeping the vendor and doing whatever is easiest (and thus most profitable for) the vendor to keep getting their implementation referrals

Now, what’s the difference between helping and pure assurance? In addition to making sure each step is accomplished effectively, this person is also guiding you through the creation of the necessary artifacts of each step to ensure success. This person is helping you define the goals, not just ensuring the goals are met. The person is simultaneously a project guide and a project evaluator, bringing the Procurement Best Practices and Technology Knowledge that your organization doesn’t have, and helping you identify the right intersection to take you forward on your journey.

And this goes well beyond just helping you write an RFP (although this is a key step, which is why the doctor has been telling you to get expert RFP help for your Procurement technology RFP for close to two decades, because a bad RFP is one of the leading causes of project failure).

This is because, as we noted ten years ago in our original Project Assurance Series (Part I, Part II, Part III, Part IV, and Part V), project success depends on more than just getting the technical specifications right. Project success also depends on getting the talent right — as it is the people who will have to use the new system. And project success also depends on getting the transition right —- if the changeover is not smooth, significant disruptions to daily operations can occur. And, equally important, they also depend on an often overlooked 4th “T” —- tracery. Organizational success depends on selecting a superior strategy and seeing it through until the desired results are achieved (or the organization changes the strategy). (And since you don’t know what you don’t know, the small cost of engaging an expert, relative to the overall project cost, will generate a return far, far greater than the technology ever will.)

Tracery, which stems from late Middle English, can be defined as a “delicate, interlacing, work of lines as in an embroidery” or, more modernly, as a “network”. Implementing a strategy requires effectively implementing all of the intersecting “threads” that are required to execute the strategy to success. If any one aspect is overlooked, the project can fail. And if you can’t even see all the threads, it should be easy to understand how most projects essentially fail as soon as they begin and why you need a master weaver if you want to beat the odds and actually succeed.

Come back for our next installment where we will dig into the six traditional project steps outlined in our original series and dive into what your independent, third party, Procurement technology project guide (who will be independent from you, your vendor, and the vendor’s third party implementation team) needs to do.

Dear Marketer On a Budget …

It’s never quantity, it’s quality.

And audience matters!

  • The majority of people who follow a celebrity aren’t following because they want pitches.
  • The majority of people who follow a major influencer aren’t following because they jive with that influencer.
  • And those that follow a minor influencer are following for a reason and are generally of a certain consumer class (based on the common reason). Don’t ask a fashion influencer for low cost apparel to sell a high end luxury watch, and in our space, don’t ask an influencer whose only use for tech is to make brainless content for followers to consume to sell an enterprise product.

These are hard truths that have been the case since even before influencers, so the following linked post from Phoebe Sophia Russell from “In the Style” (on how 150,000 on a celebrity Instagram post only produced $800 in sales) didn’t surprise me. It’s like the new startup that forks over 100K for a big bash at ISM only to come back surprised when they didn’t even manage to get a single follow up demo scheduled.

Think back to the days when Oracle, SAP and IBM (and almost no one else) used to advertise everywhere, but see almost nothing for their stadium sponsorships, airline magazine ads, etc. All it bought them was name recognition — which was important IF you could get in front of a client who’d seen your business name (repeatedly) and not your competitors (and then instinctively thought of your company as successful), but they still had to get those RFPs and meetings, which means investing in traditional sales channels that would enable that. But that’s not a strategy the vast majority of companies can afford!

SI, which has been giving away free marketing advice (including great advice from Pinky and the Brain#) since it began (because 𝘵𝘩𝘦 𝘥𝘰𝘤𝘵𝘰𝘳 has no intention of being a marketer … but still knows what works*), including this piece on Marketing 101 which appeared with the FAQ in 2007, always advocated for intelligent spending for smaller companies which focussed on publications (on & offline), events, and thought leaders who had the necessary audience, even if it was small. 100 buyers who actually want the type of products covered by the publications, events, and thought leaders is better than 100,000 individuals who have zero interest.

And the good news is that, even though many marketers during the heyday of free money would say I was off my rocker, the best marketers today pretty much agree with me, include the Marketing Maven Sarah Scudder who has teamed up with Dr. Elouise Epstein (in their DualSource Discourse podcast) to help educate you.

(Which is great since there aren’t many of us left trying to … going back to when I started, it’s just Jason Busch, Jon W. Hansen, Peter Smith, and Pete Loughlin who haven’t given up. Fortunately, we were joined by Kelly Barner and Philip Ideson of Art of Procurement and now we have David Loseby, Tom Mills, Joël Collin-Demers, and James Meads as well … )

Focus, Audience, and Education matter!

* Every single sponsor of SI before 𝘵𝘩𝘦 𝘥𝘰𝘤𝘵𝘰𝘳 joined Spend Matters in ’16 (to ’22) [and suspended sponsorships] was acquired by ’19.

# The Brain Gives Pinky a Marketing Lesson
# Where Pinky and the brain devise a plan to market their strategy