Category Archives: Market Intelligence

When a Quartet’s Not Enough, It’s Time for a Simfoni!

When you’re first effort was essentially a duo (Trading Partners), your next a quartet (MarketMaker4), what comes next? A symphony! And that’s exactly what the founders of Simfoni are trying to create. After creating two successful Procurement companies, including Trading Partners (a former e-Auction leader) and MarketMaker4 (acquired by Xchanging), the founders of Simfoni are using their experience to try and create the perfect Procurement-as-a-Service (PaaS) for end-user organizations of various levels of maturity and consulting organizations a like. Are they succeeding? Time will tell, but they are already being used, and promoted, by PWC and Deloitte (among the largest global consulting organizations), so they’re going somewhere. Where? Time will tell, but for now, we’ll give you a brief introduction.

Founded in 2015, Simfoni is a global solutions provider and solutions integrator based out of the UK and the UAE (and with an office in Australia) that combines both its own technology, it’s services, and third-party capabilities (where relevant) to bring savings and benefits to their customers. It characterizes itself as a “mobile-first” solution provider, and all of its initial applications are built around, and embrace, the mobile platform. Even it’s analytics offering is designed so the reports look good on an iPad.

The Simfoni solution consists of four main options:

  • Virtuosi
  • PocketBuyer Mobile
  • PocketBuyer Desktop
  • iOS Assessment App

Virtuosi

Virtuoisi is Simfoni’s analytics platform. Based on Microsoft BI and augmented with “roll-your-own” customized capabilities, the Virtuosi platform is custom configured for each client organization to give Procurement, Finance, Risk Management and management teams a real-time perspective on sourcing, spend, procurement and risk related performance and opportunity. It can integrate with multiple data sources and classify the data in real time for exploration through the front-end, which can be configured by Simfoni to report on whatever data the organization needs to see in whatever way it needs to see it. This is a great benefit to the platform, but could also be a limitation to an organization that wants to roll-their-own.

PocketBuyer Mobile

PocketBuyer Mobile is an app that allows the management of all low value (tail) spend in one place, whether it originates through requisitions, travel, or daily operational management. Organizational personnel on the go can use this to request whatever they need — ground transportation (car services), a new laptop, parts for the production line they are inspecting, the office supplies order they forgot to put in before they left, and literally anything else they need — when they need it. It’s intuitive and quick to use. It’s a great tail spend tool, but missing a powerful punch for larger buys.

PocketBuyer Desktop

This is where PocketBuyer Desktop should come in. However, right now this is the desktop version of the PocketBuyer application where a user can make the same requests through a web browser that they would make through the app. Literally a big screen version, the application is just as easy to use, with the major difference being that instead of taking a picture of what you need and attaching it to a request, you attach an image file. Now, the recent acquisition of PurchasingPlatform.com could change this and give Simfoni the solid P2P foundational capability they need, but, again, time will tell.

iOS Assessment App

Simfoni’s IOS aplication is native tablet “app” that provides a procurement maturity assessment and category management tool to help consultants help their client organizations identify profit improvement strategies that can also be used by internal procurement organizations with a centralized and/or center of excellence (CoE) driven model that acts as a services provider to the business.

The app encodes a detailed multi-criteria assessment that assesses an organization’s maturity on the dimensions of strategy and rating, structure and capability, category management, sourcing, contract management, purchase to pay, vendor & risk management, warehouse, IT infrastructure, spend management and analysis. It includes pre-defined outputs/answers that represent the scale of maturity against each criteria as entered, and all the consultant (or other user) has to do is select the right one for each criteria and when all is said and done, the app will automatically compute, objectively, the maturity of the organization. Moreover, the assessment is aligned with the SCOR (Supply Chain Operations Reference). It may not be perfect, but it certainly gives a solid, objective, assessment of where an organization is.

In addition, Simfoni, which does have ties to other technology and consulting providers as outlined above, has its own team of internal sourcing and procurement experts that enables it to take on the services portion of engagements as well. It’s a next generation PaaS offering which might just be the right choice for many emerging Procurement organizations. For a much deeper dive into, and discussion of, Simfoni, check out the doctor and the prophet‘s upcoming in-depth series over on Spend Matters Pro [membership required].

Are Your Suppliers Ripping You Off?

A recent post over on the public defender‘s blog asked if suppliers [are] still ripping us off. And it’s a good question, because it’s a common, constant, fear that is never talked about. Not only is it often the biggest elephant in the room, but it’s the biggest herd of elephants as there’s typically one in every room of every buying organization.

But rather than asking an array of speakers what their thoughts are, we’re going to get right to the point and give you the answer, which, surprisingly, can be summed up in six words.

That depends, are you letting them?

While your job in Procurement is to get the best damn deal you can, keeping costs as low as possible while keeping the benefits high to maximize value, the sales person’s job who is selling to you has, as their job, to get the most amount of money for the least amount of product and service, maximizing their profit and, more importantly, their bonus (which is typically 100% tied to the order value).

If you don’t do your homework and establish the true market price or true should cost price, then its likely that they can convince you that a 3% decrease on their current price (which is 30% over should-cost) is a savings and you walk away thinking you won when you are still being ripped off big time. We have to remember why so many suppliers were, and in some case, still are, resistant to e-Auctions — because these expose fat in supplier margins faster than any other sourcing exercise when you invite new, hungry, suppliers who will lower their margins just to win business.

In certain verticals, such as electronics and office supplies in particular, most suppliers make their profit by charging you as much as possible, which they do by offering you great prices on a small set of products and markups on a large set of related products that your users are just as likely, or more likely to order. For example, an office supplies vendor will give you the best deal on the 5 park of laser cartridges but the 10 pack will be 3 times the cost of the 5-pack, and the office manager, wanting to minimize orders, will order the 10-pack not knowing the 5-pack is the preferred product. And in electronics, they’ll give you a great deal on system configurations that sound good, but are sub-optimal, and then make money on upgrades a year later. For example, a desktop with the brand new processor, lots of space, and a HD screen, but only 4 MB of RAM when they know the default usage means that the machine should really have 8 MB of RAM. But there are only 2 slots, so both chips will have to be replaced at full retail rates down the road (as no special pricing was negotiated on upgrades, only full system replacements).

But it’s not just your indirect and MRO suppliers that will pull a fast one, any sleazy salesperson who sees an opening with a buyer who didn’t do their homework will pull a fast one. So if you don’t do your homework, and negotiate fact based, your organization is probably getting ripped off. Even if the costs are close to what they should be, chances are lack of hard fact-based negotiation means you missed out on value adds.

In summary, This Song’s Just Six Words Long, and whether or not you get ripped off is entirely up to you.

Vendor Scorecards DO Work – But Only if They are Done Right!

A recent guest post over Spend Matters by Andy Kohm, founder of VendOp, provided 4 reasons why supplier scorecards don’t work, which is a terribly inaccurate and a disservice to the procurement space because

  1. They Do Work if done right and
  2. what he was describing was internal vendor surveys, NOT scorecards.

Even worse, if he had said internal vendor surveys don’t work, SI would have totally agreed and hailed the post because, frankly, internal vendor surveys don’t work. Expecting enough people to fill out enough long surveys to get statistically reliable data when everyone is overworked, underpaid, and tired of doing everyone else’s job (because no one has time to do their own) is just ludicrous. It’s not going to happen, and when it does, the data and answers are not going to be that good or reliable because the surveys will be filled out in a rush. And all the reasons provided by Mr. Kohm will hold true.

But you see, a scorecard, at least a proper scorecard, is not a survey, or a summary of soft, qualitative feedback survey scores, but a summary of hard, quantitative metrics built up from hard data over time. A scorecard summarizes hard performance metrics, KPIs, and unarguable (undisputable) incident counts, not subjective scores on reliability.

We have to remember that just like anchoring can be a problem in negotiations, it can be a problem in subjective ranking. If the last couple of interactions with the supplier were problematic, the recipient is likely to fill out a fairly negative score even if the 20 interactions before that were great and, overall, the supplier is batting 800. Similarly, if the last few interactions were particularly good (because the supplier knows their review is coming up and making extra effort just to score enough to pass), the recipient may rank the supplier very positively even though 8 out of 10 requests are ignored on average. In short, for reliability, surveys suck.

But hard scorecards, built on on time statistics, reject rates, incident counts, billing accuracy, and so on are unbiased, anchored in fact (and not fiction), and work. They allow both parties to zero in on true issues, problems, and disagreements, and work collaboratively to fix them. They are the best supplier relation management tool the average organization has at their disposal and should not ever be discounted. Proper scorecards are the solution, not the problem.

Procurement-as-a-Service: High Priority or HYPE HYPE HYPE!

Next month, the public defender will be hosting a webinar on the evolution of procurement: alignment, flexibility, and Procurement-as-a-Service where he will be discussing whether Procurement-as-a-Service (PaaS) is high priority for your Procurement organization or just hype. Guess which way SI is leaning?

First of all, let’s define what Procurement-as-a-Service (really) is. Procurement-as-a-Service is the new name for the service you get from a Managed Services Provider that combines technology, personnel, and expertise to take over part, or even all, of your Procurement operations in a transparent and effective way. They use technology to identify what you are spending on, what you need, and where savings likely are; choose categories for sourcing and assign category experts; modern technology to do the sourcing and procurement; and track the purchases and payments and do m-way matching to make sure you only pay for what you get and that you get what you are supposed to when you are supposed to. They also make the process visible through, at a minimum, a reporting and progress portal, and may even give you some access to the analytics and procurement tool to run your own reports, record inventory, and upload payments.

Second, let’s break it down.

1. Technology

Nothing new here. Given that MSPs are typically using someone else’s tech, there’s nothing new here. In fact, they’re probably using inferior tech as they are looking for something that works best at managing multiple client procurement portfolios and not at conducting that best sourcing event, bringing the best analytics or optimization solution to the table.

2. People

Note that we are using people here, not talent. MSPs have people. A lot of people. Because they have to fill a lot of seats, but not all are talented, or at least not talented with respect to your business. And this is key. Talent is appropriately educated, experienced, and relevant to your business. This brings us to:

3. Expertise

While there will likely be a number of people at the MSP with expertise in your categories, this number could be a dozen or two among thousands. And you won’t likely get them working your account, nor are you guaranteed to even get the results you would get from a GPO (Group Purchasing Organization).

Third, let’s analyze what we broke down. No guarantee of even best of breed technology. No guarantee of the right talent for your organization (based on your categories or industry). And no guarantee of the right expertise, or sufficient expertise to go around.

So what is PaaS? In SI’s view it’s a quick-fix band-aid for those organizations without enough tech, talent, or transition management capability to handle its own Procurement operations. But for any organization with any capability to acquire and manage even basic tech, attract talent, and acquire and employ expertise, what does a PaaS provider offer, especially when there are GPOs, niche consultancies, and SaaS solutions that have been offering the same, if not more, for quite some time now? The answer: so far, nothin’.

So, in SI’s view, it’s hype, hype, hype. But it will be interesting to see what the public defender has to say when he goes head to head with Comensura‘s Jon Milton on March 7, 11:00 EST, 16:00 GMT.

Top Posts of 2016! An Analysis.


Procurement Leaders are Getting Deeper Into Sourcing Strategy

Consider that the 8th and 7th most visited posts are on aligning procurement strategies to business goals. Not only are leading Procurement organizations adopting deeper sourcing strategies, but they are looking to better align those strategies with business goals to extract not just savings, but value. The leaders are realizing, with inflation coming back, the days of savings in a mature Procurement organization are numbered.

Moreover, the fact that the 9th most visited post is on the direct procurement challenge, this indicates that not only are Procurement leaders looking for value, but they are beginning to realize that in order to capture that value, direct procurement has to be done correctly and requires more depth than just a simple auction for office supplies.

Then we have the 4th most visited post being part of the series on how Trade Extensions is redefining sourcing — again indicating that leaders want to do better.


Analytics is Taking Center Stage

The fact that the 6th and 3rd most visited posts of the year are deep dives into not only modern analytic technology, but modern analytic technology that is beginning to apply machine learning in adaptive and useful ways, means that many organizations are not only realizing that they not only need good analytics, but good analytics support.


Supply Chain Finance is On Leader’s Minds

The 2nd most visited post is our post on how the death of factoring will be highly exaggerated. Even though this isn’t really supply chain finance, it’s sold as supply chain finance, and companies that are still relying on it (and trying to figure out how to advance) want to understand what it is, where they are, and how long they have to advance.


Training is Still an Issue …

… even if the budget’s haven’t been restored. The 10th most visited post is on training a procurement team. Leaders recognize that their talent has to be trained to get top results, but with limited budget, they are starting to think about holistic team training vs. individual training.


But Technology is pushing to the forefront.

The 5th most visited post of the year is our rant on how driverless delivery is nothing more than a tantalizing theft target (and how over-investing in automation is not always going to save you money). And the foremost visited post of the year, part of our procurement sustentation series, is our post on IP and Patents. People want to understand technology, the protections around it, and how to tread the issue.