Category Archives: Market Intelligence

Is it time to Plus-size?

By now, you’ve probably noticed that the doctor has been contributing on a regular basis to Spend Matters CPO and Spend Matters PLUS, the first of which, like SI and Spend Matters classic, is free, and the second of which is paid (and costs 19.99 / month).

You’re probably wondering why, as SI has always been, and has always been free, as Spend Matters basic, and the doctor will not promote any blog that is not free, because of his belief that if you’re going to have a blog with the intention to inform and educate, you make sure its accessible to all.

However, Spend Matters PLUS (a subset of their PRO business offering) is not a blog, and, sometimes blogs are not enough. Why?

Unless a blogger has a large amount of sponsorship money, or is independently wealthy, (s)he can only spend so much time on the blog on a daily basis, and only impart so much knowledge and wisdom to you. (And if a blogger does generate such a significant income from sponsorships, you have to question how complete the material is as many sponsorships come with a high price tag*.) But, as SI has clearly explained over the past year, you are in Procurement hell, facing dozens of damnations on a daily basis, and the knowledge and wisdom you need to get smarter and more efficient is much, and the amount any one blogger can impart is minimal.

When it comes time to select a new solution, define a new process, or define the next challenge, you need a lot of knowledge and a lot of wisdom, and the chances that any single blog, or blogger, will have recently written everything you need is slim.

You could go to a big analyst firm or a niche consultancy to get a customized report or recommendation, but that costs a lot of money, and if you’re not sure what you need, it could be a waste of money. But if you have more knowledge and insight on the topic, you can narrow in on what you need and if you do need to hire an analyst or a consultant, you can focus them in on your needs, spend less, and get more.

Over on Spend Matters PLUS, the prophet has assembled a team of experts who are contributing detailed pieces on technology, process, and relevant topics that you as a Procurement professional will need deeper insight on, at some point over the next year, on a regular basis. In addition to the prophet, who is an expert on P2P, marketplace analysis, M&A, and solution evaluation, you have regular contributions from:

  • the maverick who is the top analyst and supply management framework developer in the space,
  • the anarchist who is one of the leading operations research, supplier management, and process evaluators in the space, and
  • the public defender who is an expert on procurement process and public sector procurement and an international correspondent

among other experts who chime in from time to time. And the articles are deep. The average length of the articles that the doctor has been contributing on are 4 pages. That’s about 3 times the average length of an SI post. And most of the articles are part of in-depth multi-part series that give you more information on a topic than most analyst firms will.

Now, is it right for you? That depends. If you are a lucky one who works for a progressive Procurement organization, then you might have subscriptions to analyst firm research and market intelligence firm publications or training academies that provide you with a wealth of knowledge and not need much more. But, if you work for an average organization which frowns on you taking the time to even fill out a subscription for a free publication, it’s more than you could ask for given the price.

SI’s recommendation is that it’s worth it. And the recent series the doctor has collaborated on, including multi-part series on Contract Lifecycle Management (platforms), Supplier Relationship Management (platforms), Marketing Spend Management, Direct Material and Commodity Spend, among others, are among the most in-depth and encompassing series on the subjects you will find anywhere. It’s not a replacement for SI or Spend Matters (CPO), but a resource that fills in the gap when your organization won’t pay for the knowledge you need and you’re forced to acquire that knowledge yourself. As this is only the second paid resource SI has ever recommended (the first being the NLPA for new Procurement professionals who still need the foundations), you know there has to be something there.

* It’s sad to say, but some companies won’t sponsor unless they get one or more of the following: final say over what is said about them, final say about what is said (or not said) about their competition, the right to guest post whatever they want on a schedule, the right to whatever marketing or registration lists you have, and/or the right to write their copy and have you stamp your logo on it (and both SI and SM have seen examples of this on “blogs” in the past — sometimes the copy wasn’t even edited and was clearly written by an internal PR person of the company the “brief” was about who couldn’t even run a simple spell check), etc. Finding sponsors who will support pure education, and not request anything more than a simple fact check on pieces on them, is a lot harder than a reader or aspiring blogger might think.

Contract Lifecycle Management VIII: Are You Ready for the Journey?

In this series, we have defined and discussed contract lifecycle management (CLM) and the requirements for an extended contract management solution. In the first few posts we laid the foundations for the series by discussing the various processes and supporting solution elements that surround CLM as a way of bounding the CLM solution space. We subsequently detailed the requirements for a CLM system from a data and process perspective, as defined by our CLM wheel model.

However, in our series to date, we’ve largely ignored the commercial performance management aspects that CLM also needs to support. This goes beyond the strategic aspects, and the performance and obligation management aspects, to the competency requirements and the integration requirements necessary for an organization to not only use, but maximize the value from, such a system.

In particular, at a minimum an organization needs to consider, and obtain support for:

  • Procure to Pay
    because CLM encompasses everything that happens between a contract being signed, which is where traditional strategic sourcing ends, and the supplier being paid for goods delivered and accepted
  • Compliance beyond Invoice Matching
    because while this is critical to prevent overspending (and the need for expensive cost-recovery), there are also insurance requirements, regulatory requirements, and other requirements that, if not met, could be much more costly
  • Risk Management
    as one unexpected, and then unmanaged, event can result in a 20% overspend instead of a 10% savings

And this is just the beginning. Depending on the organization, the following could also be critical:

  • IP Management
    if it has a lot of intellectual assets
  • License Management
    if it uses a lot of software products (and instances) or licenses a number of works for publication and distribution
  • Inventory Management / System Integration
    if the organization requires a lot of assets to be purchases, leased, and managed during the contract term to fulfill its obligations

And, of course, other commercial aspects could be important as well for organizations in a specific vertical. To find out more about some of these areas, and why you can’t forget the commercial perspective when evaluating contract management systems and prioritizing the must haves, should-haves, and nice-to-haves, check out Part VIII of the doctor, the prophet, and the maverick‘s series on Contract Lifecycle Management over on Spend Matters Plus (membership required).

Influential Damnation 100: Bloggers

Wait, what? We’re the good guys, right? Yes, we are. But that doesn’t mean we aren’t a damnation. We are. And we’re the worst kind. (And that’s why we saved this damnation for last.) Why?

We seek the truth.

This is not just bad for vendors who do not want the truth exposed, but bad for you. Because what do you do when you finally come around to the dark side that the analysts and vendors claim we spread, and your eyes get opened and you realize that the solution you rushed into is not the right one. But you’re 18 months into a 36 month agreement, and getting out is almost impossible.

We don’t pull punches.

Not only do we speak the truth, but we don’t like to sugar coat it. Not even a little bit. A spoonful of sugar might make the medicine go down, but before you will take any medicine, you have to admit that you’re sick. We help you realize when you’re sick, when you need medicine, and what that medicine is, even when you don’t realize that you’re sick. And sometimes it hurts, but once you figure it out, and take the medicine, you get stronger. And that’s what’s important.

And sometimes our messaging runs counter to the message your bosses just paid a top analyst firm six (or seven) figures for.

Talk about damnation. Especially if we give you the message for free! The last thing you want to do is find out that the thick research report you paid six (or seven) figures for gives you the wrong message and, more importantly, contains the wrong research (leaving out vendors or solutions you desperately need in exchange for solutions that only partially fill the gaps). What could be worse, especially if another CXO wasted a good part of your research budget?

And because of this, some analysts or vendors will go out of their way to try and discredit us.

Trying to prove that we’re not bloggers, that we’re really independent analysts or consultants trying to spread a message that inflates our bank accounts, or really vendor reps who haven’t yet announced their affiliation. But when we are recommending an approach that has nothing to do with consulting or products we may, or may not, be selling; when we are spreading a message that inflates the bank accounts of others (but not us); or when we are talking about vendors who won’t even pay us a dime no matter how much we promote a shared cause, then those messages can’t be true. But the confusion others will cause will only bring more damnation upon us all.

When you’ve been drawn down the wrong road, sometimes a message from the right road can be the worst damnation of all.

Consumer Damnation 73: Individual Consumers

Of course individual consumers are a consumer damnation (and you were just reminded of that while trying to keep the shelves stocked this holiday season). They are the consumer damnation. Corporations are bad. Governments are worse. But individual consumers take the cake, especially considering most of them bring their views to corporate and government purchases. And you are left trying to deal with the inanity and the insanity. When dealing with consumers, damnations are plenty.

Consumers are fickle.

Their tastes can change overnight. Today they want red. Tomorrow they want black. Then they don’t want the product at all because the competitor’s product glows radioactive green.

Consumers are demanding.

They want the newest operating system, the biggest screen, the fastest processor, the most spacious hard drive, the longest battery life, and the absolute lowest price for that new smartphone, even though all of these requirements might be mutually exclusive with today’s technology. And the minute you don’t deliver, they abandon your product to wait for the product from your competitor who is promising more than your current offering.

Consumers are impatient.

If you promise 72 hour service, you better deliver in 48 hours or they will be calling every hour asking where that service professional is. And if you can’t repair the product, you better have a replacement on hand or they will be demanding a refund for the service plan they purchased.

Some consumers are vindictive.

Your product didn’t perform. It broke a day after the warranty. The store wouldn’t take it back. Complaints are filed with every better business bureau and consumer protection agency the consumer can find, and that’s a best-case scenario. If the consumer discovers that there was a banned or dangerous chemical in the composition of the product, they rally a few friends, get a lawyer hungry for some media sensation, and launch a very public class action lawsuit. And if they get hurt opening the hard shell or sick licking the lead paint, that’s a multi-million lawsuit coming your way.

And of course Procurement will be on the hook for not getting the product on the shelves before the consumer tastes change, not getting the price point low enough to appease the consumers enough to buy the company’s product when it is missing a new feature just included in a competitor’s product, when the company contracted for service doesn’t deliver fast enough, or when the supplier ships a defective unit and a consumer gets hurt and sues in a very public way that is very damaging to the brand.

Consumers might be the reason the company, and Sales and Marketing, exist, but they are a perpetual damnation to Procurement who will have to deliver on every insane and inane promise made by Marketing or Sales (which are, as we know, their own damnations).

The Island of IT, Part II


Today’s guest post is from Torey Guingrich, a Project Manager at Source One Management Services, LLC who focuses on helping global companies drive greater value from their indirect expenditures, such as IT and Telecommunications investments.

In our last post we noted that even some of the most mature Strategic Sourcing departments tend to struggle with IT because IT spend is off limits or out of reach for traditional sourcing and procurement efforts. We then examined the three most common excuses, or hurdles, and provided some guidance on how to overcome them. Once you convince IT to give Procurement a chance, the next step is to …

DELIVER THE VALUE

Once you have overcome these hurdles with IT stakeholders, it is critical to follow through with the value that Procurement has promised in the sourcing and contracting process. Looking at a need identified by IT through a sourcing lens will likely lead to better defined requirements and a better relationship between the IT department and the supplier with whom they ultimately work.

  • Sourcing: Competitive bids and the RFx process can, and should, be used for IT and telecommunications initiatives. Because IT departments tend to partner more closely with their supply base as compared to other indirect categories, it can be easy to accept a proposal or pricing from a supplier who knows the company’s systems and basic requirements quite well. While this may be a faster route, Procurement needs to help IT ensure that the supplier’s proposal is the best fit for the organization’s needs and is competitive in the market. Work with IT to develop an RFP that allows suppliers who may not be as intimately connected with the department to propose innovative solutions and competitive pricing.
  • Scope and Deliverables: Once Procurement and IT have worked together to award an initiative to a supplier, Procurement’s value will be further demonstrated while going through the contracting process. Press your IT stakeholders to clearly define their expectations, the scope of the project, and the deliverables that the supplier will provide. Many business owners tend to think in “end state” deliverables, but be sure to inquire whether there are processes or defined stages that the supplier is expected to go through to get that end state, e.g., system, integration, and/or user acceptance testing. While there may be assumed expectations, work with IT to ensure those assumptions and expectations are defined.
  • Timelines and Acceptance: While working with IT to define the agreement deliverables, tie in timelines and dates for the company’s acceptance of mid-stream deliverables. Ensure there are key checkpoints prior to the final acceptance testing window to minimize rework or changes that need to be made. Also, be sure to use a critical eye when defining acceptance procedure and timing; often suppliers will insert language that assumes acceptance if no formal communication is received by a certain number of days. While this is intended to keep projects moving forward, you can change this language to require an affirmative acceptance by the company or at the very least, ensure the timing for default acceptance is ample enough to allow for any internal reviews that may take place.

While IT systems, products, and services may not be second nature, treat your business owners in a way that lets them know you are there to help ensure their requirements are met and their budget is maximized. IT — more than any other area — seems to consistently have budget on the chopping block, have projects pushed out year after year, and be asked to do “more with less”; by becoming a solid partner and delivering value to this group, you can not only help them make better buying decisions, but actually achieve their departmental goals.


Thanks, Torey.