Category Archives: Services

An Optimization-Free Emptoris Advanced Sourcing Service Analysis

My analysis of Emptoris’ (acquired by IBM, sunset in 2017) optimization capabilities based upon publicly available information have already been posted over on Spend Matters [WayBackMachine] (in “The Optimization Docs Perspective on Emptoris”*) as well as Emptoris’ Response* on Spend Matters  and my follow-up comment, so I’m not going to repeat it here. What I am going to do is attempt to analyze their new Advanced Sourcing Service offering based upon publicly available information (as I am not among the lucky few who have had the opportunity to see and discuss the offering).

The offering is described on their website. The information provided is the following:

  • It combines Infrastructure, Event Management, Strategy, and Expertise with Advanced Analytics
    • Infrastructure is defined as data collection and management
    • Expertise is defined as best practices, technology, sourcing cycle, and category expertise
    • Strategy is defined as a custom consultative approach for strategy development, event design, & build out
    • Event Management is defined as supplier training, executive reporting, and post event analysis
  • Buyers can define specifications, business needs, and preferred options
  • Suppliers can respond with their unique advantages, competencies, and alternatives
  • The solution can reduce sourcing cycle times by up to 75%
  • The solution can handle a project with over 130 suppliers, 275K bids, 77K lanes, and hundreds of business constraints and preferences
  • It targets transportation, packaging, print, fleet management, and related categories where the savings potential is in the 14% to 23% range
  • The offering includes opportunity identification through spend analysis and drill-down micro-analysis

An external web search turns up a number of articles that summarize the press release, but none of them add anything new. (For the links, run this google search.)

About the only original analysis I can find to-date on their new offering is over on Spend Matters:

  • “Emptoris Makes Some Noise Ahead of Sapphire”*
  • “Should Emptoris Be Wary of SAP ESourcing”*

where Jason points out:

  • While not automated to the same degree as Zycus’ new analytical and bubble chart visualization tools, the solution does make Emptoris spend visibility solutions that much more pragmatic and results driven.
  • Emptoris appears to be headed on a direct collision course to SAP
  • Emptoris’ sourcing and contract management capability remains significantly ahead of SAP
  • Emptoris has latched on to supplier performance management and development

From this, I would infer that Emptoris has integrated their Spend Analysis, RFX, Supplier Portal, Decision Optimization, Reporting, and Contracting Management solutions with best-practice templates into one work-flow driven stream-lined end-to-end solution offering that can be driven by a buyer or on of their services professionals.

Furthermore, given that:

  • Their recent update to their spend analysis platform (late last year) produced an application that is competitive with those offered by Ketera (acquired by Deem), Procuri (acquired by Ariba, acquired by SAP), and Zycus.
  • Their new contract management offering, based on a globalized integrated version of the platform they acquired from Dicarta, is competitive with those offered by iMany (acquired by LLR Partners), Nextance (acquired by Versata Enterprises), and Upside (acquired by SciQuest, rebranded Jaggaer).
  • Their RFX capabilities have always been on par with other traditional providers, such as Ariba, Oracle, and SAP and I have it on good authority that they’ve been working hard on ease-of-use and that usability is now close to or on-par with the on-demand providers such as Iasta (acquired by Selectica, merged with b-Pack, rebranded Determine, acquired by Corcentric) and Procuri (acquired by Ariba, acquired by SAP). Plus, not many providers have taken the time to build up a large library of ready-to-go best-practice templates.
  • They have a strong services arm, with their on-shore organization backed up by off-shore organizations with multi-lingual capabilities.
  • They have a decent supplier portal and are working hard on improving their supplier management and development capabilities
  • Although I still do not know if I would classify their optimization capability as advanced, they are still one of the (very) few providers to actually have a good, sound, and true decision optimization solution as per my recent No Advanced Sourcing at Oracle post and they do have a few capabilities that very few competitors have.
  • They have a lot of experience working with large companies (which is the majority of their customer base), and their infrastructure management capabilities are solid.

It is likely that their solution offering is quite good overall – and definitely better than what Oracle or SAP are going to be offering in the near future. Furthermore, their claims of up to 14% to 23% savings and up to 75% reduction in cycle times are not inflated, and are backed up by independent Aberdeen and CAPS studies, among others.

Thus, if you are comfortable with an installed or hosted single-tenant ASP model and the price-tag (whatever it may be), it’s certainly worth considering, especially if you do not have an e-Sourcing solution in place.

* All posts prior to 2012 were removed in the Spend Matters site refresh in June, 2023.

JVKG … Who?

SpendMatters unveiled its new sponsor today, the JV Kelly Group, a professional services firm headquartered in New York that specializes in developing and implementing innovative spend management solutions and effective, measurable procurement results that Jason Busch has called a best-kept Spend Management secret.

All I can say is that thanks to their innovative investment in the supply and spend management blogsphere, the cat’s out of the bag now. Within a week, I’m sure everyone, or at least everyone who matters , will know who they are – especially with five or so webinars lined up covering best practices in the sourcing and spend management space over the next three months.

If your organization is looking for a way to boost name recognition in the supply and spend management space, and to play a part in the community as well, I’d like to remind you that Sourcing Innovation sponsorships are now available and that there is a slight advantage to being the first to commit (as your logo will be the only logo until subsequent sponsors sign up).

As far as I can tell, this is the only daily blog left in the space that is independent – most of the other independent bloggers got scooped up last year by leading, forward thinking organizations and most of the other daily blogs are now not only vendor sponsored, but vendor operated. This is an opportunity to think different.

Procurement Outsourcing V.V: Provade, Take II

During my most recent Silicon Valley foray, I had a chance to catch up with Provade (acquired by Smart ERP Solutions) again and talk about how they seamlessly enable services procurement for companies with and without a PeopleSoft stack. If you remember, one of the three points I covered in my last post was how they built their solution on a PeopleTools foundation on the Oracle Stack. This is a tremendous advantage for customers with existing Oracle or PeopleSoft implementations since they can tie their solution in directly to your systems with almost no effort and set-up the bi-directional data flows in record time.

However, their solution is also a tremendous advantage for customers without (extensive) Oracle or PeopleSoft implementations – espcially those with large, involved services spend, especially in the legal, financial, contract labour, and marketing categories. They have done a significant amount of work extending their Java/J2EE technology stack to be SOA (Service Oriented Architecture) compatible. This allows them to easily integrate with other systems and enabled them to support rapidly configurable punchouts so that you can tie into your suppliers existing systems. Furthermore, it also allows them to develop Web 2.0 interfaces that are significantly easier to use than traditional PeopleSoft or Oracle (forms-based) interfaces – so current users can expect usability of the platform to only increase as time goes on.

I had a great conversation with these guys because my experience has been that:

  • there is not a lot of recognition for the importance of services spend management, which can consume up to 70% of spend in some verticals (financial, healthcare, etc.)
  • most solution providers are not offering specific solutions (with the notable exception of Servigistics (acquired by PTC) whose service parts, service price, and workforce management solutions I recently discussed, but they have a different spin)
  • most solution providers are not offering an on-demand solution with a low initial implementation cost

Furthermore, they understand that certain types of services are very complex and your offering, especially on the supplier side, needs to be customized if you want suppliers to rapidly adopt the system. One example, and one of their current strengths, is legal services. Law firms don’t bill for “services” or “tasks”, but “matters”. Most services are not fixed quote, but line item services where every line item is at a different rate (para-legal, associate, partner, fixed expense, variable expense, etc.). And they’re not always the most technical of people. (Even the majority of firms that are LEDES capable would rather log into a simple user-friendly web-based system to create a bill.)

In summary, I think they are on the ball with respect to some of the major services procurement challenges in some under-serviced verticals and that their current solution is a good solution for many firms with the challenges they are tackling. I look forward to talking with them again and diving into their process model and technology architecture in a later post.

Clarity with Claro

When I was in Chicago, I had the chance to sit down with Bart Richards, a Principle of The Claro Group (now part of Stout), and talk about their consulting practice and their sourcing practice in particular. Although the Claro group is relatively new, being in existence for less than two years, it’s team, made up of a large number of ex-Arthur Anderson and Bearing Point consultants, has been in the business for a long time and have saved $2.2 Billion dollars in sourcing and procurement spend (on roughly $17 Billion in spend), which is nothing to scoff at. (They’ve also recovered over $4 billion in insurance settlements, but that’s not the focus of this post, or blog.) They’ve also serviced over 100 organizations to date and delivered tangible bottom-line results at each.

Before I get into their sourcing practice, I would like to note that The Claro Group is an interesting firm with three primary areas of practice: Sourcing and Procurement, Healthcare, and Insurance Management Services – making them a prime consideration for large hospitals, GPOs, and other HealthCare Providers as they can help these organizations across the board. This is a very interesting position considering the relative lack of vendors and consultants in the sourcing and procurement space with this focus. Besides VendorMate (acquired by GHX, acquired by Thoma Bravo) and CombineNet (acquired by Jaggaer), I have not yet identified any other solution providers with such a strong understanding of the space. (So, if you know of, or work for, any other providers with a strong sourcing or procurement capability in the healthcare space, please feel free to reach out using the contact information in the FAQ.)

Back to their sourcing practice. I could bore you with details on their methodology, practice, etc., but this time I’d like to stick to my impression of Bart. All I can say is that if all of their consultants are like him, then they truly are client focused and willing to do whatever it takes to help you save money and improve productivity. Although they do use vendor tools to help them, they don’t insist upon or sell any specific vendor tools and instead focus on the analysis, processes, and methodologies that they believe, based upon their extensive experience (with each team member having an average of 12 or more years of experience in sourcing and procurement), will lead to tangible, measurable, and meaningful value to clients. And in this regards, the numbers don’t lie. They’ve saved, on average 12.5%, across all of the projects they worked on, which is quite significant, especially considering this is the most you can hope to save, on average, if you implement advanced sourcing methodologies in house (as per Aberdeen’s recent “Advanced Sourcing and Negotiation Benchmark Report”).

Their process is a simple and to-the-point three-phased approach that they use to rapidly identify opportunities. They start with an assessment where they review your process, organization, technology, and historical data to determine your opportunities, estimate the required effort, and compose a timeline. They then execute the recommendations that result from the first phase by revising organizational and process design, implementing new technology, and managing the change to capture the identified savings opportunities. Finally, they measure the impact, report on compliance, and implement Supplier Relationship Management. Simple, but effective.

Protiviti: Manage Risk, Reap Reward

Your supply chain will be disrupted. Bet on it. You’ll win. The only two things more absolute in this world are death and taxes. I’ve told you that there is Real Risk in your supply chain. I’ve reviewed the basics of Managing Business Risk. I’ve even went so far as to tell you that Your Supply Chain is NOT Secure. But I still feel that I have not even come close to drilling the point home as to how at risk you are every minute of every hour of every day or how likely it is that your supply chain is going to be disrupted in a big way – and how much this will cost you if you are not prepared.

But that’s a post for another day. Today, I’m going to start helping you identify where you can go to get help, and the first company I’m going to point out to you is Protiviti, specialists in Independent Risk Consulting with an in-house expert group on Supply Chain Risk. Rising from the ashes of the old Arthur Anderson back in 2002 (with a little help from Robert Half International), Protiviti has more than quadrupled in size without diverging from their core practices of internal auditing, technology risk management, and business risk management (where the supply chain group resides).

Recently, I was fortunate enough to be able to talk to one of the leaders of the Supply Chain Risk group at Protiviti and talk about how they help clients identify, mitigate, and manage supply chain risk and I was quite satisfied with what I heard. Rather than trying to sell you a big black binder with an industry standard system generated risk management plan (which is not as useful as you might think since every company is different and has different risks), they instead work with you using a well-defined methodology that they’ve refined over the years to build a complete picture of the risks you face (a risk assessment), the mitigations you have in place or available to you, and a plan for managing those risks going forward. Furthermore, they help you build appropriate cross-functional teams that they work with throughout the process to make sure that when they are done, you understand not only what your risks and mitigations are, but how they were derived and how you carry the process forward.

The first thing they do, and you must commit to this for the process to work, is a risk assessment that evaluates your overall operations, supporting supply chain, regulatory environment, and organizational goals to help them build a risk profile that helps you understand where your risks are, the probability of them happening, and the dampening effect of any mitigations you currently have in place. They then categorize the risk universe into meaningful groupings, such as operations, supply base, distribution chain, and regulatory environment, that can be addressed and evaluated from a similar functional perspective. Then, working with your cross-functional teams, they help you qualify the probabilities, potential impacts, and mitigations that you can use to address them, including controls and monitors that you already have in place today. They then help you refine any identified and approved mitigations into processes and procedures that you can use to detect and manage a risk. After all, risk management is not a one-time project, but a continual process. However, you have to start somewhere, and a project focussed on supply risk is a great place to start.

They also assist you in putting in place critical and sustainable/repeatable risk management capabilities including, but not limited to, strategies, policies, processes, organizational accountabilities, information for decision-making, continuous identification, monitoring and control, tools and methodologies, and base data integrity procedures.

However, what I really liked hearing was that Supplier Relationship Management (SRM), Contract Lifecycle Management (CLM), and Compliance Management (CM) best practices done right were really risk management processes. SRM is not about managing your supplier, it’s about managing the risk associated with a supplier not performing. CLM is not about keeping track of a contract over it’s lifetime, but about making sure the critical terms of the contract, designed to mitigate your risk, are adhered to. CM is not about making sure your purchasers don’t go rogue, it’s about managing maverick spend to non-approved suppliers that increases your risk. After all, the key to long-term sustained financial performance is not cost savings – you’re always going to have to spend money – it’s cost avoidance – making sure you don’t spend any more than you have to. I know a lot of executives, and CFO’s in particular, these days only care about cost savings, but they’re just a bunch of short-sighted nitwits who need a good smack up-side the head. After all, there’s a limit to how much you can save! Once you’re performing at the best-in-class level, sourcing every category at market value, and optimally allocating the award so as to minimize your Total Value Management (TVM) lifecycle cost (or Total Cost of Ownership on steroid cost) – there’s nothing left to save – the best you can do in such a situation, should you be enlightened enough to reach it, is to avoid unnecessary spending. You avoid unnecessary spending by making sure everything goes according to plan. You do that by managing risk.

Another tidbit worth repeating is that they are currently working with Michigan State University(and AMR) on a new certification program for C-level executives in value chain risk management to help them understand, and proactively manage, risk. After all, considering one supply chain disruption can wipe out all of your strategically sourced savings, it’s critical that not only you, but your financial decision makers, understand this and allow you to invest in the methodologies and tools you need to make sure that if something really bad happens (your primary contract manufacturer’s plant goes up in smoke, for example), you know about it in time to do something about it (such as immediately route all your orders to your secondary manufacturer) before your supply chain shuts down, and you lose millions of dollars in sales.

So when you embark on your next risk management planning effort, be sure to put Protiviti on your list of potential vendors. (The reality is that such an effort is something you should never embark upon entirely in house – you’ll never see all of your own weaknesses.)