Category Archives: Market Intelligence

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.

Don’t Get Sucked in By Impressive Words!

It’s conference season, and that means marketing overload for many vendors. And there’s a few words the doctor is hearing a bit too much and he’s NOT impressed! So what are these words?


Digital. Digital Procurement. Digitized. Digitized Procurement. Digitization. Ugh. They’ve been using variations of the same word for almost 20 years — and despite claims to the contrary, the meaning hasn’t really changed. You’re analog, or you’re digital. There’s no degrees to digital.

Look at the dictionary definition for crying out loud! Of, relating to, or using data in the form of numerical digits. What’s new, or even enticing, about this? ABSOLUTELY NOTHING!

Internet of Things

The internet has ALWAYS been an internet of things. Computers are not people. They are computers. The only difference today is that we are sticking computers in more things to collect and transmit sensor data automatically rather than reading it, and entering it into the computer. It’s not the big whoop most companies are making it out to be as most companies haven’t developed much that uses that near real-time in a truly useful way.


It’s not artificially intelligent. It’s cognitive. And the bull crap has reached a whole new level. Let’s look at the definition.

Of or relating to the mental process of perception, memory, judgment, and reasoning.

Yes computers can perceive through sensors, store data in memory, use algorithms to assign, or judge, and use very advanced automated algorithms to reason, but we’re overlooking one key word here. Mental. Computers don’t have a mind, and they are not intelligent. The implication here is that which is cognitive is intelligent, and they are not intelligent.

We haven’t even reached true AI yet in any field and we are supposed to believe that a little Sourcing or Procurement vendor has reached the next, cognitive level of AI development? While a best in class vendor may have a few algorithms that are almost cognitive for a few, select, situations, considering the billions going into AI research and the limited progress most specialist vendors are making, you know we’re not ready to be throwing this term around.

And, an honorable mention (because, while not common in our space yet, it’s coming):


the doctor‘s been seeing this word a lot on social media in marketing and commentary, and, unfortunately, it seems like it’s starting to creep into our space. For those of us that actually went to a real University and have a sound (classical) education, we know that Postmodernism is a rather broad intellectual movement across the arts and fields with applied arts (like architecture and archaeology) based on a philosophy that takes us from the literary-influenced philosophy of modernism to a post-modern way of thinking that developed in the middle of the last century and reached wide acceptance in the 1980s, when it was a Land of Confusion.

This was the time of the MRPs (and not the ERPs). Do we really want to be associating our new and innovative solutions with that era?

So please, please, please don’t get sucked in by the the impressive words. Instead look for impressive, time-saving, value-adding functions (and forget the feature lists). (But that’s another rant.)

The Revolution of Purchasing: Part II

Yesterday, in Part I, we noted that even though Purchasing has been evolving in the leading Supply Management organizations, thanks largely in part to some great technology platforms outlined by Lisa Nyce of Source One Management Services in her guest post three years ago on The Evolution of Purchasing, it has been an evolution to more strategic purchasing on select categories, and not a widespread revolution.

And this is problematic in SI’s view because we’ll never have a true purchasing revolution until all Spend Under Management is truly Managed Spend. Right now, many Procurement organizations have the fallacy that just because the spend goes through the e-Pro/P2P/I2P system, that doesn’t mean it’s managed. It just means it’s tracked and available for analysis. And, more importantly, the spend strategy and decision has to be enforced. Negotiation a contract with Supplier X for 10% below current prices is useless if everyone keeps buying from Supplier Y. Deciding to go three bids and a buy is useless if the buy is from the highest price / lowest book value supplier just because the buyer knows they’ll deliver. Directing a user to a catalog with preferred items is not spend under management if the user can just punch-out to Amazon and buy from an overpriced third party because they want a non-standard product. And so on.

For all spend to be managed spend, at least things have to happen:

  1. All spend has to be categorized.
    Uncategorized spend is unmanaged spend. It gets shoved into the tail spend, and is left for anyone with budget authority to manage as they see fit. Catalog buy. Spot buy. Non-preferred vendor spend. Big barkup store down the street spend. Etc. If it gets into a category, and that category is a managed one, there’s a chance it will be managed.
  2. All categories have to properly purchased.

    Every category has to have an associated bucket. Strategic. Non-strategic 3-bids and a buy due to high spend volume. Catalog. Just categorizing is not good enough — categories must be mapped to preferred strategies. And bought according to those strategies.

  3. All purchasing decisions have to be enforced by a platform.

    Once a purchasing strategy is selected for a category, it must be executed. And once an award or decision has been made, it must be enforced. The platform should not permit a strategic category purchase to go through punch-out catalogs or a catalog buy for an on-contract item to be made with an off-contract supplier.

And, since there just isn’t enough manpower for a Procurement department to tackle 100% of Spend Under Management (as the average organization struggles to tackle 1/3 of strategic spend each year), the platform must support automation of tactical 3-bids and a buy, catalog buys, inventory re-orders, etc. Modern cognitive solutions, with enough rules, data, and market intelligence can buy low-dollar, non-strategic categories as good, if not better, than overworked purchasing professionals. Automate 3-bids and a buy. Automate catalog purchases with on-contract suppliers. Automate re-orders for on contract product and services when inventory gets low. Automate that where your strategic insight provides little value, and then increase the percentage of strategic spend that gets strategically sourced every year and you will have a real purchasing revolution.