Category Archives: Process Transformation

Tonkean: Making Enterprise Procurement work with ProcurementWorks, Part 2

In Part 1, we introduced you to Tonkean, an enterprise applications provider founded in 2015 to transform the enterprise back office. Tonkean leverages smart technology to bring people, process, and technology together in a manner that revolutionizes how businesses operate, allowing people to focus on high value work that gets results, and not redundant data processing, unnecessary application usage (which requires unnecessary training and unnecessary time), or unnecessary emails. The primary goal is to increase adoption and push employee requests, and actions, through official channels, instead of having enterprise employees find backdoors and dark hallways to get around cumbersome systems and processes they don’t want to use.

After providing a brief history and an overview, most of Part I focussed on Tonkean’s AI Front Door, a smart AI interface that was built by a team that understands the strengths, weaknesses, and, most importantly, the limits of AI, especially LLMs and (Open) Gen AI, and that includes pre- and post- processing to verify the requests and responses as reasonable, and where confidence is lacking, not provide any response (and send the inquiry, and response, or lack thereof, for a human who can, if necessary, tune the underlying system after review).

Today we will overview the rest of the Tonkean Intake Orchestration Platform for Procurement and how it can help your organization.

Procurement Intake and Guided Buying

The core of ProcurementWorks is their intake ability described above and guided buying that gets a requester to the right process and form and allows them to monitor, take part in, and/or execute the process end-to-end as required. They can do this through their platform, via e-mail, or a third party platform, like Slack or Microsoft Teams, through their integration capability. If the buy is small and can be put on a PCard, the system will direct the user to do so. If it’s large and requires a buyer to run a Procurement event, the system will guide the buyer to provide all the information the buyer needs and provide updates to the requester after each step of the process is concluded (which the buyer can proactively monitor through the ProcurementWorks request tracking application that monitors the entire workflow, which can be as simple as the request, Procurement approval, and PO/contract generation or as involved as a request, budgetary approval, procurement acceptance, RFX, award selection, InfoSec Approval, Risk & Compliance approval, Legal approval, contract generation, contract negotiation, signing, and completion).

All of this can be done in the Tonkean platform if desired, which will integrate with, push data into, and pull data out of any enterprise applications that are used for Finance, Procurement, Risk, Legal, and Contracts. For example, the system can pull the associated budget for the category from the budget system and send the appropriate manager the request for approval based on the expected cost and the category budget. If approval to proceed is received, the buyer can setup an RFP, which can then be pushed into the enterprise’s sourcing platform (which could be Coupa or Ariba) for execution, and then the results pulled back into the Tonkean request tracking and management module. Procurement can then select one, send it off to InfoSec, Risk, and Legal, in order, for approval, which can come in through the platform, and, once received, use the platform to push the award details into the CLM that can generate the contract, which the platform can then push to the supplier for signature through their e-Signature platform, and when it’s signed, push it back into the CLM.

The platform comes with a number of built-in Procurement process templates that can be customized as needed to support every organizational category and buying process based upon organizational needs. It can be integrated with all the applications and all the document stores, pull in the necessary attachments, help with exchange and version management, and track approvals. And it can be accessed through the form based interface or the chatbot, natively or through API connections.

Procurement Center (Workspace Apps)

The enterprise can create multiple views (and even multiple, separate portals if they like) to support both the Procurement Team and the employees that need to interact with Procurement (so that Legal, Risk & Compliance, IT/InfoSec can all have their own views, and even their own portals if they want to handle their workflows through Tonkean versus their current applications). (Thus, in addition to the Procurement Request Tracker and Manager, Procurement could build a custom Risk and Compliance Portal, Contract Negotiation Tracking and Management Portal, Vendor Inquiry Portal, and so on.)

How little or how much is enabled by default in the Procurement Center is up to the customer, but typically the Procurement Center will contain:

  • AI Front Door: Their name for their AI request intake experience, which can process free text requests or guided requests based on drop downs
  • My Requests: A listing of all of the users’s requests where they can click into the Request Tracker (which listens in near real time for system updates from all integrated systems)
  • My Approvals: A listing of all of the approvals and reviews in the user’s queue (that other users are waiting on)
  • Reporting Dashboards: Tonkean is not a BI/Analytics platform (and integrates with yours for deep Analytics/BI), but comes with a number of out of the box templates for workflow/process/cycle time analysis, request tracking, review and approval tracking, supplier onboarding/review request tracking, sourcing request tracking, invoice monitoring, etc. and can build custom dashboards by role (CPO, CFO, etc.) and pull in data from the connected BI systems to populate those dashboards if desired
  • My Supplier Requests: A listing of the suppliers that the user has requested be onboarded, where they can click into the New Supplier Tracker that tracks the pre-onboarding and onboarding steps that must be completed for the supplier to be onboarded in the Supplier Master (with workflows that adapt to the supplier type; a software vendor offering a product that processes financial or personal data needs considerably more reviews than a new office supplies or janitorial supplies vendor)
  • Solutions Studio: where the super/admin user can update the workflow for the request tracker and all other modules in the system

Reports and Dashboards

As indicated above, there are a number of out-of-the-box reporting templates for Procurement that are easily instantiated/modified in the Tonkean platform. These include, but are not limited to:

Purchase Agreements
The Purchase Agreements Dashboard will summarize, by quarter or month, the number of requests, completed requests, total spend, average completion time for each step (FP&A Review, Management Review, Security Assessment Review, Legal & Privacy Review, IT Review, and Accounting Review, etc.), active requests by status, vendors, spend by vendors, and other key agreement metrics.
New Suppliers
The New Suppliers Dashboard will summarize the number of new supplier requests that came in, the suppliers in each state (NDA Sent, NDA Completed, InfoSec Review, Approved for Onboarding, Profile in Process, Approved, Onboarded in SIM, etc.), and allow a user to click in and see who the suppliers are in each state, who the requester/owner is, and other key data or flags as desired.
Existing Suppliers
The existing suppliers dashboard tracks all suppliers with contracts, insurance, certifications, etc. expiring in the next 90 days where something needs to be done.
CFO Dashboard
The CFO Dashboard will generally contain an overview of spend by quarter/year, compliance, overall productivity, productivity by stakeholder, cycle time by process, workload by buyer/analyst, etc. and other key metrics pulled in from the other reports.

Solutions Studio Module Builder

The core of the Tonkean Enterprise offering is the Solutions Studio that is used to create the no-code workflows from action blocks, triggers, and conditional checks. Action blocks tend to fall into coordination actions (which require people) or workflow (which connect coordination actions and data blocks). Conditional logic make it easy to define requests for information, status, and action items; respond, send updates, and provide notifications; and create approval cycles and assign owners. Workflows make it easy to update data fields, create new (instances of) data objects, trigger module actions, perform (textual) analyses and extract text, create models, train models, and introduce programmatic delays or waits (for information from parallel workstreams, for example).

Data actions provide the means to create, read, update, and delete as applicable (according to the principles of least access required, which will be configured by the Tonkean team on implementation so that any data that should only be capable of being changed in a base system will not be capable of being changed through Tonkean regardless of the user’s authority level) the relevant data in the connected source systems. There are blocks for each system that make it easy to drill in and work with the data in that system, as each data source is preconfigured with the default actions it supports.

For one of the 100+ systems already natively integrated with Tonkean, adding the system as a data source is simply a matter of providing maybe a few connection parameters, and the data source will be good to go for your team, with all of the standard actions available. In the Enterprise Component Manager, it’s easy to drill in and find out, for each data source, the inputs it will accept, the outputs and actions the interface supports, the data retention and audit policies, the access rights, and admins and owners, and general information on connectivity restrictions. It’s also easy to drill into the Tonkean access log and see a complete history and to drill into the data through the Tonkean app (so you don’t have to go to the native app to see what’s available in each object/record, how complete those objects/records usually are, etc. or do low-level SQL queries in the underlying database).

In addition, super users and admins can also define new custom actions if their implementation supports additional data or actions, or they want to define custom actions with more limited capability or complex actions that ensure a sequence of actions (such as updates) happen all-or-nothing. All they have to do is define the action type (Get, Post, Put, Patch, etc.), the URL, the data encoding format, the relevant field(s), and the relevant data and the platform creates the workflow logic for them.

Building the workflow is easy in their graphical select drag-and-drop environment where action blocks and data sources can be dropped and connected by arrows that can encapsulate the associated conditional logic for sequential and parallel workflows.

Procurement Knowledge Base / Component Library

The ProcurementWorks solution can also be configured to support the procurement knowledge base, either by housing documents natively, linking to relevant repositories, or both, allowing for Tonkean intake to also sere as the help center as well as the purchasing request center.

In addition, the Tonkean Component Library contains a large number of standard, out of the box, workflows with embedded standard/best practice, for Procurement, Legal, Compliance and other standard enterprise functions that the customer organization can enable and customize as desired in the Solutions Studio. With Tonkean, an organization doesn’t have to start from scratch, and Tonkean will help the organization pre-configure all of the modules/workflows of interest on go-live.

Data Source (& Communication Platform) Management

The Tonkean platform makes it easy to manage organizational data sources. It’s easy to query which sources exist, what data they have, where they are used, what data can be retrieved, which data can be updated, and what the Tonkean access policies are. Similarly, one can manage which communication platforms are integrated and what they can be used for.

In addition, for each connected data source, Tonkean can provide you a “native” view into the core application and data if you so desire. Want to query your Coupa invoices natively in Coupa? No problem! Tonkean can bring up the appropriate screen from Coupa in a frame where you can see exactly what invoices are there and their status. Want to see the full ticket created in JIRA for the IT Review Team? No problem! Tonkean can pull up the Read-Only JIRA screen for your perusal. It truly is people coordination and enterprise platform orchestration.

In conclusion, if you are a large midsize or global enterprise and have an adoption problem, are struggling to get the value out of your enterprise systems, or are looking for ways to make the whole greater than the some of its parts, and need a better intake platform to boot, consider including Tonkean in your evaluation. They just might be what you need to take your current enterprise software investments to the next level.

Tonkean: Making Enterprise Procurement work with ProcurementWorks, Part 1

Tonkean was founded in 2015 to transform the enterprise back office. Tonkean leverages smart technology to bring people, process, and technology together in a manner that revolutionizes how businesses operate, allowing people to focus on high value work that gets results, and not redundant data processing, unnecessary application usage (which requires unnecessary training and unnecessary time), or unnecessary emails. One of the big problems Tonkean saw with traditional enterprise systems is that anyone who didn’t need to use the system daily was resistant to learning yet another system they saw as difficult or cumbersome (which applied to any system that didn’t use their terminology), adoption was a major problem, and employees would constantly look for ways to circumvent the system. Tonkean’s goal was to solve the adoption problem by providing users a superior intake experience, that could be as simple as a standard form-based or natural language interface like they’d find on the web, that didn’t require any training and that helped these employees make their requests through official channels instead of sneaking through back doors and dark hallways.

After a few custom projects, they found an initial niche in the Legal department and created Tonkean LegalWorks to help Legal Teams with legal mail routing, legal matter intake, matter lifecycle management, legal discipline and category classification, conflict waiver processing, law firm onboarding, contract routing and review, and even legal risk monitoring. It brought together the systems used by Legal (email, word processors, specialized Legal Billing Management solution, etc.), any risk and compliance applications they use to ensure their lawyers and firms dot all the ies and cross all the tees they need to take on every case and practice in every state they are taking legal matters in, and any other enterprise applications the team used to work and communicate internally (Slack, Teams, etc.).

And while we’re not here to discuss LegalWorks, it is through the development of LegalWorks that they learned how to bridge the gap between people, process, and technology in a in a way that empowered their clients to spend more time on strategic (legal) work instead of redundant data entry and system usage, get more value out of the tools they already purchased, and be more productive and satisfied with their technology. They learned how to enable a department to use the tools they have in ways that went beyond the original use cases, and learned they could do more and set out to identify where the biggest needs were and where they could do more. And once they found Procurement, and realized that Procurement had a lot of the same challenges as Legal, but considerably more amplified (with more systems, more complexity, and higher stakes), they knew they had found an area where they could provide their enterprise clients with the most value (and especially those that were using the major S2P suites but getting low utilization rates due to lack of intake support and a lack of integration with other internal systems).

When investigating Procurement in their enterprise customers, they found that while the major suites were reasonably suited for, and well used by, the Procurement team in strategic projects, they weren’t used much in tactical purchasing, especially in tail spend, as most of the organizational users found the system too complicated and bypassed it whenever possible (as the P2P tool lives on the long tail of enterprise applications of choice for the average enterprise employee).

So, as with some of the new breed of vendors who started specifically with the goal of Procurement intake and/or orchestration, one of their first goals was to help their Enterprise customers get more value out of their big S2P suites (and Ariba and Coupa in particular; for example, they have Intake Orchestration for Ariba and the Coupa Intake Experience to help the organization route all indirect spend, no matter how far down the tail, through Ariba or Coupa). While that’s where they are still focussed (given their current Enterprise customer base), they’ve expanded their ProcurementWorks to be a full Procurement lifecycle orchestration solution, from intake to resolution, regardless of what solutions the customers have or don’t have, what enterprise applications the teams use to communicate, what external catalogs or data sources they need to integrate with, and what policies and procedures need to be followed. In this way, ProcurementWorks is a system-agnostic solution that wraps around the customer’s existing process and applications to orchestrate and better coordinate that process.

However, one major difference is that, to Tonkean, full orchestration means creating a solution that solves all of the Procurement related problems an organization’s employees have, not just Procurement requisitions or catalog buying. That means answering all of their Procurement related questions in addition to taking their product and service requests, guiding them to the right systems if needed, or being the one interface of choice if Tonkean can be that. That means a much smarter intake process that can take any Procurement related natural language request, interface with all of the organizational data sources, and provide an appropriate answer.

For Tonkean, that starts with a smart AI interface, that they call the AI Front Door. The AI Front Door, unlike many other LLM-based products, is not just ChatGPT in a shiny wrapper, but a hybrid solution based on in-house engineering, the client organization’s preferred LLM, and knowledge systems owned by the client. It’s a very sophisticated “chatbot” compared to most offerings on the market, a technical definition would be very extensive (and lose non-PhDs), but we can illustrate much of the uniqueness of the capability with a high level overview and an example or four.

For example, when a user inputs a request, the general approach the system takes is:

  • use their AI to process the question for the type, intent, and goal
    and inform the user if they have no information (or are unable to process it) while simultaneously
    redirecting any unanswerable query to a human expert for review
  • use internal, trusted, knowledge bases to get initial information and potential answers
  • feed the question, processed clarification, and internally retrieved knowledge into the organization’s LLM to provide Natural Language feedback to the user, which could be the answer, or a refinement question if ambiguity existed in the question or potential answers from organizational data sources, which causes (an extension of) this 3-step loop to repeat
  • verify the response is sensible before presenting to the user (and, if not confident, route to a human for feedback for future internal Tonkean model training while informing the user no relevant information can be found)

Thus, if the user asks if there is an agreement with Vendor V:

  • their AI Front Door will process the query and determine that the user is asking if there is a signed contractual agreement with Vendor V that is currently active, and potentially what that agreement is
  • create the appropriate queries for each organizational system that stores contracts and agreements
  • take the responses and construct a carefully engineered prompt for the LLM that will return an answer indicating if there are agreements, and, if so, what they are and where they can be found (possibly including a direct link if the document can be accessed through the Tonkean platform)

If the user asks if she can purchase a license for SaaS app S:

  • their AI Front Door processes the request, determines that the user wants to make a purchase, it falls in the software category, and asks a few clarifying questions about the type and purpose of the product and, if it discovers the organization already has a license for a tool of that type, asks why the other tool won’t do
  • the system takes the responses and prompts the user with a link to launch a purchase request, where the system then pre-populates key fields of the organization’s software license purchase request form based on its learnings from the AI Front Door interaction and data attributes from other relevant systems (such as budget information in the ERP)
  • the system bundles the appropriate information and prompts the LLM to create grammatically correct responses that not only explain the request to the Procurement Buyer, but a Supplier if an RFP is required
  • the draft form is then presented to the user to verify, and one click puts it into the Procurement Request queue (where it can be accessed from the ProcurementWorks My Requests page at any time)

If the user asks for the procurement policy for SWAG for the marketing event she is attending:

  • their AI FrontDoor processes the requests and determines its a policy question
  • it creates the appropriate pattern match, DQL, or index query for each of the organization’s policy document data stores and collects the appropriate responses and documents
  • creates an appropriate prompt for the LLM that appropriately forms the question while asking the LLM to use only the inputs fed to it to create the response
  • ensures the response that comes back has a decent similarity to a subset of the text from the documents and then presents the natural language summary to the user

If the user asks the system for the results of the hockey game he missed working late:

  • the system processes the requests, realizes it doesn’t have that information (unless, of course, the enterprise is a sports news outfit), informs the user it doesn’t have that information and ends that interaction there

In other words, it’s built to be the central information source and jumping-off point for all types of inquiries and tasks a Procurement professional or employee with Procurement needs is likely to have, with the intent of cutting out 90% of unnecessary emails, texts, questions, and requests an augmented intelligence system can answer or guide a user through.

Moving on, the core of the Tonkean Intake Orchestration Platform that their Procurement solutions were built on is a workflow automation platform with extensive built in workflow customization, data integration, and form creation capability. In the platform, the customer can build forms (using a no-code form editor) they need to power any Procurement process (which can be created and modelled using a no-code process editor) they have, and customize them for requesters, buyers, risk & compliance, IT, or any other department as needed. They used this capability as the foundation not only for their Coupa Intake Experience and Intake Orchestration for SAP Ariba (as organizations never replace major investments, but innovative organizations look to improve and expand upon them), but their guided buying experience, supplier onboarding, and tail spend automation (among others).

One key differentiator is that any workflow can be updated at any time, something which is generally not possible in your traditional Procurement Suite such as Coupa, Ariba, and Jaggaer. For example, many of their customers now require an additional AI Review of any platform that uses AI to determine the nature of the AI and any direct and indirect risks in its proposed application to the business from a technical, legal, and brand perspective. For example, if the vendor is using Open Gen AI (such as ChatGPT), there are technical risks in that these platforms have been repeatedly demonstrated to have biased, harmful (and even murderous), hallucinatory, thieving, and sleeper behaviour. There are direct legal risks in that you could be sued (and on the hook) if the AI makes a recommendation that ends up causing personal or business harm, and indirect legal risks if the technology was trained on stolen data or data that contained copyrighted, illegal, or national secret material. There are brand risks if the Open Gen AI product you are using all of a sudden suffers extreme public backlash for its actions (or your software results in a decision that tanks shareholder value or increases environmental harm). However, they have found that most of the suites they work with do not yet have many of these new “standard” compliance checks in their relatively rigid product workflows (and telling their customers to just include it in the InfoSec review), which increases the likelihood a key check will be missed. [Considering the attention that AI is getting and the fact that legal frameworks will need to come soon, not the best idea for a large organization NOT to be assessing AI risks now.] However, with Tonkean, it takes minutes to add a compliance check and ensure it gets done by the right people before a decision is made on any Software purchase or use.

In our next article, we will dive deep into the major components of the Tonkean ProcurementWorks offering.

Visibility into Vizibl, The Collaboration Platform for True Supplier Innovation

It’s been a decade in the making, especially since it took years for Vizibl (founded in 2013) to find it’s focus, but what was once yet another SRM (Supplier Relationship Management) platform is now a truly leading Supplier Collaboration, Innovation, and Transformation platform.

Starting out with the vision of a better SRM, it took a while for Vizibl to find its niche and double down on it. In fact, it took years of working with clients with highly specific (customization/process) needs for them to realize that they were good at developing for and supporting specific, sometimes, complex processes and years more for them to sit back and identify the commonality, design standard project and service layers, and bring them to market. But they did, and they have, and we will discuss the first major project/service layer they are bringing to market later in this article.

The Vizibl platform has seven main components:

  • Supplier Information Management Foundation
  • Supplier Collaboration Workspace
  • Supplier Innovation Hub
  • Supplier Relationship Management Module
  • Dashboards, Analytics, and Reporting
  • Program Layer: (Foundation for) Specific Development/Improvement Programs that Cross-Cut the Entire Platform
    (built on a virtual platform integration layer)
  • Supplier Sustainability Management

1. The Supplier Information Management Foundation is what you would expect from a leading SRM platform — it can track all of the core data and meta data you would expect on a supplier and can be extended as needed to track all of the data you require across all areas of supplier information, products, risks, compliance requirements, performance requirements, contracts, projects, initiatives, and activities you wish to manage.

Supplier Onboarding is straight forward as it’s quick and simple to create a new company record to begin the process, with only minimal data needed. New suppliers can be onboarded as standalone, children of an existing company, or related entities. The platform can maintain complex supplier tree relationships and the tree can be visualized along with a roll up of relevant metrics, project counts, and appropriate relationship data.

2. The Supplier Collaboration workspace is where the buyer can communicate with the supplier, spin off action plans and initiatives, store ideas and plans, pull in and push out data as needed, and put thought into action.

3. The Supplier Innovation Hub is where the core of the magic happens. This is where challenges can be issued, goals set, and projects planned. It’s where projects are defined to increase supplier performance, improve product designs or manufacturing, increase sustainability, or decrease CO2/GHG emissions.

Projects have activities (or tasks), roadmaps that link them together, objectives (outcomes), value tracking metrics, integrated communications, and teams.

4. The Supplier Relationship Management Module is the glue that holds it all together. In addition to integrating all of the pieces, it also supports the creation of basic supplier action/account plans, the definition of strategic objectives, and integrated overview dashboards. It also allows for the definition of supplier teams (that it calls circles) that represent the different teams the organization will be working with, the management teams, and boards of relevance.

5. The Dashboards, Analytics, and Reporting capability is used to summarize and display the various types of data, metrics, and indicators tracked by the platform. These dashboards cannot only roll up metrics across the platform, but can also roll up metrics in, and across, projects by stages, as well as break them down by regions or supplier trees.

6. The Supplier Sustainability Management module is one of their latest modules focussed on tracking and managing an organization’s sustainability initiatives. It can track all of the emissions for each supplier, those that are reporting, the associated spend, and any other GHG data of relevance to the organization. It can also track all of the data associated with ESG surveys requested by the organization, which can be custom created and as broad or deep as required.

7A. The Program Layer is the toolkit that they use to build custom cross-platform program management capability that allows an organization to tackle new, and possibly exciting, initiatives that can transform their operations, product, and / or supply chains. Programs consist of suppliers, goals and targets, indicator metrics, associated data and reporting, summary dashboards, and scores.

7B: Decarbonization as a service is the first offering from Vizibl built on the program layer that integrates all of the platform capabilities to track scope 3 carbon across the supply chain by extending the sustainability management module to focus on the import and calculation of carbon emissions by supplier over time as well as best practices and learnings that can be shared with a supplier to help them reduce their emissions through leaner production, cleaner energy sources, new production processes, etc.

When it comes to the administration of the Vizibl platform, an administrator can configure, more-or-less, everything. First of all, they can configure the organizational tree as needed to match their organizational structure and include subsidiaries and use a variable number of levels for each organizational branch. So, the organization can have the global holding company; American, European and Asian holding company subsidiaries; individual (holding) companies for each country it operates in; and, if necessary, breakdown into individual locations or divisions if needed for management purposes. You can have five levels in Asia, four levels in Europe, and three levels in the Americas if that’s what’s necessary to exactly match the organizational structure. And of course, each company node in the organizational tree can have its unique settings, inheriting from the node above anything that does not need to be changed.

Similarly, because a company is a company in the system, full supplier organizational structures can also be modelled according to their company structure and modelled down to the individual (factory) location. This is particularly important since a diversity initiative may be global but improvement efforts might be restricted to one factory producing one particularly unique component for one product line.

Then, the organization can configure, for that company:

Account Plans
for each supplier, the company can define the strategic objectives, guiding principles, and target behaviours; these can be defined from scratch or added from a common library
Data Imports
to define regular / repeating file-based imports
Initiatives & Opportunities
the overarching initiatives and/or opportunities being sought, the plans and project stages, questionnaires, suppliers, etc.; the form builder is section based, supports all standard HTML objects, and all of the (numeric) data collected can be subjected to metrics and rules (to map to binary/integer) which can be defined on multiple choices
allows a user to define the performance metrics / KPIs, organized into categories, that are to be tracked, define what levels they are tracked at / rolled up to, and even customize the metric calculation in individual nodes
define the user permissions (by role)
centralizes the organizational projects
define the supplier relationships by mapping the supplier to the specific nodes in the organizational structure where the relationship exists as well as the segment (division/category) they are servicing
define and customize the reports
define the project states for initiatives and opportunities, rejections, suppliers, etc. as needed to match the organizational process; can start with defaults
encapsulates all of the surveys that can be reused across initiatives and opportunities
custom tags for tagging initiatives, opportunities, suppliers, etc. for quick search & filter
User Management
define the organizational users
Value Trackers
defines, and centralizes, the metrics that will be used in the innovations, opportunities, and performance tracking

In summary, the administration is very powerful … in fact, it’s one of the few solutions where the organizational structure for all companies (buying and supplying organizations) is extensively customizable, where initiatives can be tailored to the subset of relevant relationships and locations, where the inheritance for an initiative can be customized, and where you fully customize and localize all supplier interactions to just the organizations and teams that you need.

This is the first aspect of Vizibl that truly makes it stand out. The degree of customization of initiatives only to the relationships of relevance, teams of relevance, with metrics of relevance is far beyond what most of the traditional “Relationship” solutions actually offer.

The second aspect of Vizibl that makes it stand out is the new program layer they’ve built to support the creation of programs that tie together all of the relevant SXM capabilities needed to completely manage an organizational initiative across the supply base. In many platforms, the organization needs to manage the surveys, performance metrics, reports, projects, collaborations separately across the different modules of the platform that were built up over time.

The third aspect of Vizibl that makes it stand out is the new Decarbonation-as-a-Service offering built on this program layer that integrates all of the platform capabilities to track carbon down to scope 3 across the supply chain, provide insight into best practices and learnings to reduce emissions, allow for the creation of projects and initiatives to tackle the opportunities, track improvement over time, and essentially turn measurement into action into improvement. Carbon calculators are a dime-a-dozen from everyone and their dog, and can be built in 15 minutes in any good modern (spend) analytics platform, but few platforms do real monitoring, few platforms allow for the creation of supplier development projects, and fewer still provide real insight into what can be done to get results.

In other words, if you really care about the “R” in Supplier Relationship Management, and truly want to manage that relationship for true supplier development and improvement, you should definitely make sure Vizibl is on your short-list.

A CPO Leading a Spend Management Strategy is a Key to Organizational Success

Not that long ago, the doctor gave you THE SIGN that you need a CPO which, directly put, was that your organizational spend was over 10 Million a year. No ifs, ands, or buts about it! Not long after, he found this article over on which pointed out that empowering business success was The Art of Mastering Spend Management. This article stated that companies should consider implementing a spend management strategy, regardless of their size and it made him happy (even though the article looks like it was written by a junior copy-editor* who just cut and paste standard spend management summary sentences from generic spend management publications as it was not very deep or specific) because CXOs need to hear this at a high level over and over and over again until they get it. (Note that the doctor doesn’t get happy often. Most articles just make him angry. Sometimes very angry, especially when the conscientious invoke their right to dare to be stupid and embrace artificial idiocy, but that’s a rant for another day.)

The article starts off by clearly stating that a spend management strategy plays a vital role in today’s economic reality as it enables companies to control costs, boost financial efficiency, and make informed decisions. It ensures resource optimization, agility, and long-term stability, enhancing competitiveness and adaptability in a rapidly changing business landscape.

This is most certainly true. And all one has to do to see that it is true, and it would have been so much better if the article said this, is remember the first formula they teach you in business school:
Profit = Revenue – Expense

Since Spend Management allows you to minimize expenses, this helps you maximize profit. And when you consider that
Margin = Sale Price – COGS      and that
Margin % = (Sale Price – COGS) / Sale Price      and that
Margin % for most industries <= 10%

This says that every $1 saved in expense generates at least as much profit as every $10 increase in sales. As a result, spend management is at least ten times as effective as sales or marketing and key to get a grip on early, even before you can afford the full time CPO. The CFO and COO should develop best practices for any decisions that result in spending, monitor the decisions, ensure corrections are made (and employees [re-]trained) when mistakes are made, and baselines generated for all recurring costs. Even though they might not realize the same level of success as an experienced and dedicated CPO, the baselines they generate and the knowledge they capture will be key when the CPO starts as the knowledge will allow them to dive in quickly and find near-term and mid-term opportunities for improvement (and cost reduction) and the benchmarks will allow them to not only prove it, but ensure that all bids received are competitive.

The only thing we want to note is that the important aspects of spend management, especially for smaller organizations, are:

  • strategy,
  • process (that implements the strategy), and
  • governance (that ensures the process is followed and the strategy implemented)

Technology is not critical (or even necessary), and only technology that supports the process (and collects the appropriate data) should be implemented.

This is important to note because this article is sponsored by a particular vendor in an effort to promote a particular product (which is only good for T&E spend, not all organizational spend) and you don’t necessarily need that technology (or any other instance of that technology) to have a spend management strategy and do proper spend management, especially if you are a smaller organization. (However, larger organizations do need good T&E spend management, and spend analysis, because flowers should not be $5,000 unless it’s a greenhouse.)

* but what should one expect considering it was sponsored by SAP to promote SAP Concur (and routed through their PR Agency)?

The Procurement People-Process-Technology Pain Cycle …

Recently on LinkedIn, someone asked the trick question of which came first: process or technology. The answer, of course, was people since, when Procurement, the world’s second oldest profession, started, it was just a buyer haggling with the seller for their wares. and this is how it was for a long (long) time (and in some societies was as far as “procurement” progressed), until shortly after a culture advanced to the point where people could form private businesses that were entities unto themselves. Once these entities started to grow, and multiple people were needed to do the same job, they realized they needed rules of operation to function, and these became the foundations for processes.

But when business buying began, there was typically no technology beyond the chair the employee sat in, the table they used to support the paper they wrote their processes and records on (and the drawers they stored the paper in), the quill and ink they used to write with, and the container that held the ink. And in many civilizations, it was like this for hundreds of (and sometimes over a thousand) years. The first real technological revolution that affected the back office was the telephone (invented in 1876, the first exchange came online in 1878, and it took almost 30 years for the number of telephones to top 1,000,000 (600K after 24 years, 2.2 million after 29 years). [And it took 59 years before the first transatlantic call took place.] The next invention to have a real impact on the back office was the modern fax machine and the ability to send accurate document copies over the telephone. Even though the history of the fax machine dates back to a 1843 patent, the modern fax machine, that used LDX [Long Distance Xerography], was invented in 1964, with the first commercial product that could transmit a letter sized document appearing on the market in 1966. Usage and availability was limited at first (as the receiver need to have a fax machine compatible with the sender), but with the 1980 ITU G3 Facsimile standard, fax quickly became as common as the telephone. But neither of these inventions are what we consider modern technology.

When we talk about “technology” in modern procurement, or modern business in general, we are usually talking about software or software-enabled technology. This, for some businesses, only became common place about 30 years ago (since most businesses could only afford PCs, and even though they were invented in the 1970s, it was the 80s before they were generally available commercially, and the 90s before most smaller businesses could afford them [for the average employee]), and only commonplace in the largest of businesses 50 years ago. Once has to also remember that the first general purpose automatic digital computer built by IBM (in conjunction with Harvard) only appeared in 1944, and that IBMs first fully electronic data processing system didn’t appear until 1952, and, as a result, back office technology really only began in the fifties, and was only affordable by the largest of corporations. (Furthermore, even though he first MRPs were developed in the 1950s, the first general commercial MRP release wasn’t until 1964, and it took over a decade until the number of installations topped 1,000. [And MRP came before ERP.]) In other words, technology, beyond the telephone [and fax] did not really exist in the business back office until the MRP. And it wasn’t common until the introduction, and adoption, of the spreadsheet. The first spreadsheet was VisiCalc, on the Apple II, on 1979. This was followed by SuperCalc and Microsoft’s Multiplan on the CP/M platform in 1982 and then by Lotus 1-2-3 in 1983, which really brought spreadsheets to the masses (and then Excel was introduced in 1985 for the Mac and 1987 for Windows 2X). (And 36 years later Excel is still every buyer’s favourite application. Think about this the next time you proclaim the rapid advance in modern technology for the back office.)

In other words, we know the order in which people, process, and technology came into play in Procurement, and the order in which we need to address, and solve, any problems to be effective. However, what we may not fully realize, and definitely don’t want to admit, is the degree to which this cycle causes us pain as it loops back in on itself like the Ouroboros that we referenced in our recent piece on how reporting is not analysis — and neither are spreadsheets, databases, OLAP solutions, or “Business Intelligence” solutions as every piece of technology we introduce to implement a process that is supposed to help us as people introduces a new set of problems for us to solve.

Let’s take the viscous cycle created by incomplete, or inappropriate, applications for analysis, which we summarized as follows:

Tool Issue Resolution Loss of Function
Spreadsheet Data limit; lack of controls/auditability Database No dependency maintenance; no hope of building responsive models
Database performance on transactional data (even with expert optimization) OLAP Database Data changes are offline only & tedious, what-if analysis is non-viable
OLAP Database Interfaces, like SQL, are inadequate BI Application Schema freezes to support existing dashboards; database read only
BI Application Read only data and limited interface functionality Spreadsheets Loss of friendly user interfaces and data controls/auditability

This necessitated a repeat of the PPT cycle to solve the pain introduced by the tool:

Technology Pain People Process
Spreadsheet Data Limitations Figure out how to break the problem down, do multiple analysis, and summarize them Define the process to do this within the limitations of existing technology
Database Performance Issues Define a lesser analysis that will be “sufficient” and then figure out a sequence of steps that can be performed efficiently in the technology Codify each of those steps that the database was supposed to do
OLAP Stale Data Define a minimal set of updates that will satisfy the current analysis Create a process to do those updates and then re-run the exact same analysis that led to the identification of stale data
BI Tool inability to change underlying rollups / packaged views define a minimal set of additional rollups / views to address the current insight needs, as mandated by the C-suite create a process to take the system offline, encode them, put the system back online, and then do the necessary analysis

In other words, while every piece of technology you implement should solve a set of problems you currently have, it will fail to address others, introduce more, and sometimes bring to light problems you never knew you had. Although technology was supposed to end the pain cycle, the reality is that all it has ever done is set it anew.

So does that mean we should abandon technology? Not in the least. We wouldn’t survive in the modern business world anymore without it. What it means is that a technology offering is only a solution if it

  1. solves one or more of the most significant problems we are having now
  2. without introducing problems that are as significant as the problems we are solving

In other words, technology should be approached like optimization (which, in our world is typically strategic sourcing decision optimization or network optimization). Just like each potential solution returned by a proper mathematical optimization engine should provide a result better than the previous, each successive technology implementation or upgrade should improve the overall business scenario by both solving the worst problems and minimizing the overall severity of the problems not yet addressed by technology.

This is why it’s really important to understand what your most significant business problems are, and what processes would best solve them, before looking for a technology solution as that will help you narrow in on the right type of solution and then the right capabilities to look for when trying to select the best particular implementation of that type of technology for you.