Category Archives: Procurement Innovation

Grading The Prophet on His Supply Chain Predictions …

Hopefully you’ve been paying attention over on LinkedIn as The Prophet has been sharing his predictions for the Procurement and Supply Chain space for the coming year as the vast majority are right on the money.

When the series is done, the doctor will discuss each prediction in more detail, but for now, he’ll just direct you to the articles so you can catch up before The Prophet completes the series and you miss possibly the best intelligence on what is coming your way in 2024 (and what you need to consider if you are going to be anywhere near prepared for it):

Current Grade: A!

It Was Nice to See Procurement Get a USA Today Headline, But …

… it would be nicer still if the article made any sense!

Last month, the USA Today ran an article on How to Optimize the Procurement Lifecycle of Your Business that gave the doctor hope that maybe Procurement would get a sliver of the just desert it deserves. But, alas, the article was yet another example of how the big publications don’t care, don’t actually verify the content, and allow whatever big company gets their attention to push their agenda.

Because SEO has no place in any article on “How to Optimize the Procurement Lifecycle of Your Business”. Sales cycle, maybe. But Procurement cycle? Not a chance!

Let’s back up.

The article starts off by noting that understanding the procurement process is vital to improving cost efficiency, ensuring quality procurement solutions, and staying compliant with regulations, which is all true, and all critical to any business (among other things, but you can’t overwhelm the average reader who’s likely not a Procurement expert). It also notes that the procurement process is fraught with complexities and challenges which is also true, and also critically important for a non-Procurement person to understand.

Then it says that optimizing the procurement process entails the use of modern technologies, insights, and strategies, which gave the doctor hope that maybe it would help an average user understand what kind of technologies the organization needed, what insights the technologies should provide, and what types of procurement strategies the organization might want to consider.

But instead of actually providing these key insights it goes on to say that inefficiencies in procurement management can lead to increased costs, delayed deliveries, and compromised quality, which, while also true, is not that helpful at this point (and should have been listed as examples of the complexities and challenges highlighted above). It used this as a lead in to how modern point-of-sale (POS) systems are instrumental in dealing with inefficiencies, WHAT THE HELL?, which is used as a lead in to a whole section on digital transformation: incorporating SEO for Procurement Optimization, WHAT THE FUCK?

A POS solution is NOT a Procurement solution, and it’s certainly NOT instrumental in dealing with inefficiencies in Procurement management. Procurement is about acquiring the product an organization needs when — and where — it needs it. While a modern POS system can push roll up data into the inventory management system which, in turn, can generate forecasts to feed Procurement, a modern POS system is not necessary because all Procurement needs is sales projections, and if the delivery timeline from the source in Bangladesh or Shanghai is 45 to 60 days, it only needs 60 days of granularity, not sales data by the hour! Logistics will need that granularity to do finer forecasts to push stock where it is needed before it is needed, but NOT Procurement.

But the cardinal sin of this article is claiming that incorporating SEO techniques into the digital transformation strategy of the business can add another dimension to procurement optimization. No NO NO NO NO! The article claims that with SEO techniques, businesses can reach out to a wider pool of global suppliers, which is completely false because THAT’S NOT HOW SEO WORKS! SEO helps people doing searches find sites that match certain keyword searches, and, thus, would only work if the potential supplier has a sales person who is actively using the internet looking for new customers, who is using the keywords that the site has been SEO’d for, and who is searching in the organization’s language and in the organization’s geography (as most search engines prioritize same language results in the region). In other words, the chances of a supplier you might actually consider finding your SEO-optimized site and reaching out to the right person at your organization is only slightly better than you winning the grand prize in a mega-millions lottery.

The proper solution for finding new suppliers is a supplier discovery / network solution like
Apex Analytix,
Graphite Connect,
MFG,
Onventis,
Promena,
ScoutBee,
Supplhi,
supplier.io, and
Tealbook.

NOT SEO!!!

So, even though Procurement is the life blood of the business, when it comes to mainstream coverage, Procurement Don’t Get No Regard, No Regard At All!

The One Sign You Don’t Have a Highly Functional Procurement Department

Recently, on Linked In, Anders Lillevik, who (once) tried to buy and drowned in paperwork (which is why he decided he needed to find a Focal Point), decided to post what he thought were the six signs your procurement efforts aren’t delivering the impact they should. In his view, they were:

  1. No spend visibility
  2. Unhappy customers
  3. Backlogs and delays
  4. Poor supplier relationships
  5. Reliance on manual processes
  6. Department is seen as tactical, not strategic

… which were signs that your Procurement department is not delivering, but not the one sign you have to look for to determine whether or not you have a highly functional Procurement department, since these are all symptoms of a single root cause. In fact, if you wanted to go down this route, instead of identifying the core problem, you could also add the following to Anders’ list:

  1. Spend is spiralling out of control while the
  2. Company is having to fire-sale / toss out expired products and outdated inventory on a quarterly basis and
  3. Your brand is in the toilet thanks to excessive carbon, poor working conditions / human slavery, and excessive waste (and wasteful practices) in the supply chain.
  4. Every department head is screaming “The Sky is Falling!”, “The Sky is Falling!”.

… as these are also signs that your procurement efforts aren’t delivering the efforts. But if you want to know whether or not you have a highly functional Procurement department, all you have to really do is answer this one question:

Do you have a strong CPO providing quarterly metrics charting success improvements over time?

Now we know this is a bit of a cheat, as it’s actually two parts, as just thinking you have a strong CPO is not enough, you need the metric-based reporting to verify, but that’s it. If you have a Strong CPO leading a procurement team charting key metrics across all relevant areas, key categories and initiatives get managed, and, eventually, improved. Moreover, you will find that:

  1. you have great spend visibility across all Spend Under Management (SUM) which will increase over time
  2. you have happier customers as your quality, reliability, and predictability improve in key areas and remain consistent in others
  3. backlogs reduce over time along with unexpected supply chain delays
  4. supplier relationships, at least for key products and services, improve
  5. process automation is employed where appropriate
  6. the department starts to assist other departments with strategy, and begins its journey from tactical to strategic
  7. spend increases are at least contained to inflation
  8. inventory management (and inventory loss) improves
  9. improved supplier vetting and risk analysis weeds out any suppliers known to be exceptionally polluting, use sub-tier suppliers that turn a blind eye to working conditions or slave labour, or be completely indifferent to CSR activities
  10. the department heads stop screaming “The Sky is Falling!” and instead scream “Why Is Everything So Bl00dy Expensive!” (even though Procurement consistently meets or beats market prices)

Not perfect, but all signs that your procurement efforts are delivering the impact they should, or at least getting there.

Is Your Supplier Management Built On Bedrock?


Sometimes I feel
Like I need a new platform
Sometimes I feel
Like I’ve been banished
To the city of cavemen
The city of Bedrock
Where I’m a Flintstone
Now I’ll tell you why

Well, I’ve got I’ve got a fax for invoices
Well, I’ve got I’ve got an AP clerk writing cheques
Well, I’ve got I’ve got a green screen ERP
We push a little paper and we drink our cares away

… sound familiar? Then this article is for you!

Bedrock was founded by people who knew what it was like to live in the stone age of Purchasing and Supplier Management and decided to do something about it. More specifically, a supplier management platform that was designed to support Accounts Payable AND Procurement with a tool that’s as easy to use and as streamlined for suppliers as it is for the buyers they are building the platform for.

In addition, it’s the first platform we’ve seen since Lavante (acquired by PRGX in late 2016, where the auditors feared it and the tech team didn’t truly comprehend it [or they would have done with it what Opera, now ElectrifAI, did with BIQ — rebuild their entire platform on it]) that is built to not only support recovery audit, but detect potentially duplicate payments before they are made (with more functionality on the horizon for 2024).

Bedrock was designed to be the supplier onboarding, information management, and accounts payable support platform that the majority of organizations, especially in the mid-market, don’t have. We’ll address each of these core capabilities separately.

But first, when you login you are taken to the dashboard, which is customizable by Bedrock, or your power user, to display summary widgets that summarize all information in the system — number of suppliers, in onboarding or vetting, cleansing success, total associated spend, total recovered, total prevented, projects in progress, and so on. The widgets are completely customizable as well, and can display visual reports that summarize any piece of data in the system. Bedrock’s new UX, releasing in December, was designed to not only simplify and enhance the user experience, but to allow for any data element, including data elements added for specific installations, to be processed and reported on.

Before we start with onboarding, we’re going to start with Cornerstone Cleanse and Cornerstone Verify, which are the two modules you’re going to want to employ when Bedrock first implements their platform.

Cornerstone Cleanse is designed to help you create your supplier golden record. Bedrock runs your organizational supplier data from your AP, ERP, or last generation e-Sourcing / e-Procurement solution through its solution, identifies duplicate / missing / (obviously) erroneous data, adds data from their own global supplier database if they have it, automates the supplier requests for any remaining data, and then, once the profiles are updated, they can push to your ERP/AP or source systems where you need up-to-date data and/or want to store your golden record. (Note that they are PROs at API management, so if you were to augment your Bedrock platform with a Tealbook data feed, they would be able to automatically fill in all the missing data, and do deeper validations on data elements than they could do without a third party data feed [since they are limited to data type validations where the supplier isn’t in their database, i.e. is that a valid ISBN/address/etc.] as well as simplify the onboarding for a new supplier,)

On top of that, and this is something you don’t see much outside of the suite/enterprise-focussed solutions (with the enterprise price tag to match), is their Cornerstone Verify solution where they can automatically validate banking, registration (TIN, IEO, etc.), government sanction (OFAC, HHS, PEP, DPL, etc.), and other key identifiers using their 60+ out-of-the-box integrations (with new ones being added every month) they have with the appropriate third parties. More importantly, they do more than return a match/no match, they also return and cache all information associated with the check, so if something matches (that you didn’t expect to) or doesn’t match, you can see the entire record from the TIN, OFAC, HHS, or PEP registry. This allows you to determine whether a (non-match) was the result of a data input error … as you don’t want a mis-key denying a perfectly good supplier or allowing a questionable supplier to be verified. While there are a few last generation providers that have more verifications, their new platform allows them to add a new API / lookup in two weeks or less, so if they’re missing something you actually need, they can have it integrated before your implementation is complete. Note that while banking verifications might be limited (and US based at the moment), they are currently working on integrating global banking verification capability, which is coming in 2024.

And, of course, Cornerstone Cleanse and Cornerstone Verify can be continuously applied to all new suppliers as they are being onboarded with Cornerstone Onboard.

Cornerstone Onboard is designed to be an easy-peasy one-screen 20-minute basic onboarding process for the supplier. [Exceptions would be if you needed them to upload/define a lot of product/category information.] (A basic onboarding can literally be done in 10 minutes, if you only need a few pieces of information and a few documents.) (And only minimal meta-data and contact information needs to be defined for a supplier to be invited.) Standared onboarding asks the suppliers for information in the following 9 categories, which can be marked as mandatory or optional.

  1. Company Information – standard metadata tracked by all SXM solutions
  2. Additional Vendor Contacts – one must be defined to invite the vendor
  3. Financial Documents – with easy drag-and-drop upload
  4. Tax Document Information – for verification against US/EU registries
  5. Bank Details – for e-payments
  6. Product & Category Information – can be as minimal or extensive as the buyer and/or supplier likes
  7. Trade References – again, as minimal or extensive as the buyer and/or supplier likes
  8. Insurance Information – with metadata for auto-reminders to the supplier upon forthcoming expiry
  9. Minority/Diversity Certification – with document upload

The supplier can easily expand each section as needed, fill in the information, collapse the section, and continue (making a one-page registration process truly manageable). It saves partial progress (in case the supplier rep needs to go and track down a document), verifies that all mandatory information is completed before the supplier submits, and will run basic data (type) validations as well. Once the supplier returns the profile, all of the Cornerstone Validations are run, it goes into a queue for approval, and the buyer is notified. When the buyer accesses the profile, if any validations fail (or are inconclusive due to missing data), the buyer can easily see that and if the failure is due to missing/incomplete data, one-click flip the profile back to the supplier asking for updated information / documentation and if it fails due to sanctions, one-click deny the supplier. And if everything is okay, one-click approve the supplier.

Once the supplier is onboarded, it’s easy to query for, and bring up, the complete supplier profile on one screen (with expanding/collapsing sections), edit information, drill into verifications or attached documents, see open projects (in recovery), and even add new fields to the profile. Bedrock will customize the (default) supplier profile for you on implementation, adding any fields that you need, and you can add fields later as needed.

Once you have Bedrock implemented, whether as a standalone solution or integrated with your AP or ERP, you can activate their Keystone Recover solution, which is their contingency-based Accounts Payable recovery solution. As a first step, they apply their (semi-)automated 3-step recovery process which recovers an average of 0.15% just based on the payment data and invoice meta-data in your system and the statements the suppliers upload — which is 50% more than an average audit recovery solution will find. Then, they will dive into exceptions or abnormalities with their AP experts, ask suppliers for clarifications or additional uploads, and may find even more. Their solution can find duplicate payments and overpayments.

Once you have loaded supplier payments and invoices into their system, you can active Keystone Prevent which you can use to prevent duplicate / obvious overpayments before they are made. With their Keystone Prevent solution, you can drag and drop an ok-to-pay file into the platform and it processes all of the payments against the invoices and historical payments and immediately identifies any (likely) overpayments or duplicate payments. With a single click, you can un-approve the identified over/duplicate payments and then export a revised payment file with just payments that are obviously okay. It doesn’t matter what AP / payment system you use — Bedrock already supports a number of file formats and can easily add yours during implementation if you are using a payment system file format they haven’t seen yet.

Moreover, when they identify a duplicate/overpayment, they ask the supplier for an explanation of why it happened so they can identify a root cause and either make a recommendation to the supplier to prevent it from happening again, create a new rule / algorithm to more easily identify similar situations with that, and other, suppliers int the future, or both. (This allows the company to understand why errors are happening and proactively work with suppliers to fix their system or process to prevent them from happening again.) Also, once an overpayment is detected, Bedrock follows up to get a credit memo or refund, depending on the buyer’s preferences.

And the buyer has complete visibility into the process at any time. Payments/invoices processed, supplier statements requested, supplier statements uploaded, supplier statements processed, claims opened, claims closed, credit memos received, refunds coming, refunds received, and associated root causes for each claim. A buyer can also click into any claim and see the complete communication history.

Finally, you can even use the solution to do Payments with Keystone Pay. Bedrock takes over your payment operations and accomplishes payments using their partnership with Finexio.

And the new UX allows the solution to be completely configured by a Power User. A Power User can add new users, and, section by section, grant different levels of permissions to the user. So only people with payment authority will see banking details, only people with purchasing authority might have complete access to the product and category information, only account owners can edit, and so on.

A Power User can also define the currencies, the e-mail templates used to invite suppliers, GDPR rules, roles, claim preferences (for Audit Recovery), verification rules (including mandatory verifications a supplier has to pass in order for a buyer to be given an approval option), and basic platform configuration settings. These settings can include localizations, cron jobs, authorization workflows, reminder intervals (for document refresh), and PDF support (among other things).

So, if you’re looking for a modern Supplier Information/Onboarding Management solution with great support for Procurement and Accounts Payable, and you’re looking to minimize your AP losses from over and duplicate payments (as well as reducing your risk of fraud as you can verify supplier entities and bank accounts), and even simplify payments as a whole, we highly suggest you take a look at Bedrock — especially if you are a mid-market operation that can’t afford the few enterprise solutions that are out there (or are tired of paying thousands of dollars and waiting 6 to 12 months for them to add a single field to your supplier profile).

Bedrock is a great foundation for your supplier management activities, and will help get you out of the stone age. In fact, we predict that if you need a SXM solution that supports Procurement and AP, and implement Bedrock, like Weird Al, it won’t be long before you’re singing:


Yabba dabba, yabba dabba dabba doo now
Yabba dabba, yabba dabba dabba doo now
Yabba dabba, yabba dabba dabba doo now
Don’t know what it means but I say it anyhow!

Bedrock Anthem

Why Should Small Businesses Invest in Procurement Software?

Plenty of reasons, but the doctor was surprised to see that one of the best articles for a small business layperson that listed some of these reasons was an article on Intelligent Living on 7 Reasons Why Small Businesses Should Invest in Purchasing Software. While e-Procurement vendors are usually targeting mid-size, or larger, organizations (as they want 6-digit deals, and small businesses can’t afford more than 5-digit deals, and micro businesses not more than 4-digit deals), e-Procurement software, especially turn-key self-serve software, is beneficial for small (and micro) businesses as well because it helps organizations of all sizes.

All organizations spend money, and as a result, all organizations can overspend, get defrauded, spend too much time on tactical (thunking) tasks, etc. Low-end baseline 80% e-Procurement solutions can help them immensely, even those that cost as little 500 to 1500 a month. (Yes, they exist. After all, why did the doctor say that 120K is enough for full Source-to-Pay.)

The article points out the following seven (7) benefits of e-Procurement solutions in everyday layman terms which an average small business person should be able to understand.

Automated Purchase Orders
Quickly generate accurate purchase orders from catalog items or repeat buys and push the orders into your Accounts Payable (AP) and/or inventory systems.
Vendor Management
Unified view, complete order and contract history, and automated alerts.
Budget Control
Set budgets, monitor spending against budgets in real time, and set alerts when budgets are (close to being) exceeded.
Real-time Analytics
Real-time spending reports against up-to date data with simple trend analysis.
Enhanced Security
SaaS providers that have industry standard security certifications need to stay on top of cyber security, something the average small business would really struggle with.
Integration with Other Systems
Most small businesses are not very tech-savvy and a platform that integrates with the other systems they use is very useful to them.
Scalability
Most of this software can scale up to support more users, more catalogs, more POs, more transactions, etc.

In fact, as a small business, the only other things you would care about starting off is:

Invoice Matching
to make sure the invoice matches the PO (or is from a known vendor if it’s for a one-time off-catalog product or service you wouldn’t normally do a PO for)
Contract Tracking
basic governance with document storage with searchable, indexable, metadata for quick location for price and term verification

Again, e-Procurement is great for small businesses (and some of the providers in Part 37 of our Source-to-Pay+ Series are priced right for smaller businesses). It’s even greater to see plain language explanations of the benefits that small business owners can understand.