Category Archives: Sourcing Innovation

Digging Into Significant Sourcing Supplier Management Synchronization Part II

Earlier this week we started to describe the second most significant change to the upcoming Q2 Release of the Spend Matters Solution Map, and that is the introduction of a new common sourcing – supplier management section because you can’t do sourcing without suppliers and you don’t manage suppliers without the ultimate goal of doing business with them

This new section contains the following common sub-categories:

  • Enhanced Information Management for discovery and onboarding
  • Performance Management for tracking performance
  • Relationship Management for managing the relationship
  • Risk Management for keeping tabs on, and managing, the risk
  • Enhanced Portal for information management and collaboration

Our first post explained why these sub-categories were relevant. In our last post we covered the first three sub-categories. Today we’re going to start discussing what’s important to consider in the remaining two categories.

So what are the key capabilities we’re looking for in the risk management and enhanced portal sub-categories?

Risk Management

  • Assessment because if you can’t assess a risk, you can’t properly identify the magnitude of the risk and the need to monitor it
  • Mitigation Planning because credible risks need to be planned for and mitigated
  • Model Definition to allow you to quantify both the likelihood of the risk and the expected cost should the risk materialize
  • Monitoring & Identification to allow for the events that could (potentially) materialize to be monitored for and detected
  • Regulatory Compliance to quantify the extent to which the platform can track compliance requirements and a supplier’s ability to conform to them
  • Supplier Risk Management to model overall supplier risk based on assessment, models, external monitoring, third party data, compliance, and performance

Supplier Portal

  • Information Management to allow a supplier to maintain, or at least comment on, their data (and data related to them)
  • Performance Management to allow a supplier to respond to their performance review’s and conduct 360-degree reviews on the buyer
  • Relationship Management to allow the supplier to raise issues, respond to issues, and collaborate on corrective action plans
  • Collaboration to allow full interaction and feedback

These are also all key capabilities for sourcing and for successful supplier management.

Digging Into Significant Sourcing Supplier Management Synchronization Part I

In our last post we started to describe the second most significant change to the upcoming Q2 Release of the Spend Matters Solution Map, and that is the introduction of a new common sourcing – supplier management section because you can’t do sourcing without suppliers and you don’t manage suppliers without the ultimate goal of doing business with them

This new section contains the following common sub-categories:

  • Enhanced Information Management for discovery and on-boarding
  • Performance Management for tracking performance
  • Relationship Management for managing the relationship
  • Risk Management for keeping tabs on, and managing, the risk
  • Enhanced Portal for information management and collaboration

And our last post explained why these sub-categories were relevant. Today we’re going to start discussing what’s important to consider in each of these categories.

Enhanced Information Management
There are three main categories of functionality we are looking for:

  • Discovery and the ability to find suppliers beyond the platform
  • On-boarding Support and the ability to get new suppliers quickly into the platform
  • Supply Base Profiling and the ability to create holistic supplier profiles

Performance Management

  • KPIs and the ability to define and manage them
  • Preferred & Blacklisted Suppliers and the ability to define and manage them appropriately

Relationship Management

  • Issue Management and the ability to define, track, and manage issues
  • Plan Management and the ability to define, track, manage, and resolve plans to manage and resolve issues

These are all key capabilities for sourcing and for successful supplier management. Tomorrow we’ll review the last two joint categories.

Significant Sourcing Supplier Management Synchronization

Over the last couple of weeks we’ve been laying the foundations for the significant changes coming in the upcoming Q2 release of Spend Matters Solution Map, with the new common-foundations and the Sourcing, Supplier Management, and Analytics Maps designed by yours truly, the doctor of Sourcing Innovation.

While the biggest change was the introduction of a new common platform section, which evaluates solutions based on the underlying platform (which is becoming more and more important now that more players are offering “suites” and the longevity of a platform without a good platform is limited), the next biggest change is the introduction of a new common section that overlaps sourcing and supplier management because you can’t do sourcing without suppliers and you don’t manage suppliers without the ultimate goal of doing business with them. (And while this is not yet common to e-Procurement, it may soon be a common requirement for any catalog providers as more and more such providers offer enhanced supplier management and interaction.)

So what are the common elements that one needs to consider?

  • Enhanced Information Management for discovery and onboarding
  • Performance Management for tracking performance
  • Relationship Management for managing the relationship
  • Risk Management for keeping tabs on, and managing, the risk
  • Enhanced Portal for information management and collaboration

And why are these important cross application elements?

  • Suppliers are the life-blood of your organization, but they don’t consistently perform over time and new suppliers are sometimes vital. That’s why discovery and on-boarding are so vital.
  • The key to good performance from your suppliers is monitoring and managing that performance.
  • The key to correcting performance and preventing problems in the first place is often the result of good relationship management.
  • The key to preventing unexpected supplier-based disruptions (which affect a significant number of supplier chains every year) is to keep a tab on risks and prepare for the significant ones with mitigation plans ready to go.
  • They key to keeping information up to date is to let the supplier help you with a portal that is built to do so (and that they want to use).

So what should you look for? While we won’t dive into every detail (but you will be able to with a custom Solution Map if you want to (just contact Spend Matters to find out more), we will highlight some of the more important details ( so you can know that when we evaluate a vendor’s technology, we truly evaluate the technology from the point of view of a technology analyst, not an industry analyst (see our recent post on Industry Analysts vs Technology Analysts) and this is absolutely critical if you want to select the right technology.

What is a Good Foundation for S2P Tech?

A couple of weeks ago in our posts on What Elements Should You Be Looking For In A Platform (Part I and Part II) we outlined some of the key platform requirements we are looking for in the new Spend Matters SolutionMap (where Sourcing, SXM, Analytics, and the vast majority of Common Platform requirements were defined by the doctor) to give you a hint, but it’s a lot to take in.

And might be more than you need today when you just need to solve a few major pain points and advance on your S2P journey, especially if you still don’t have any dedicated modern technology or are still on Procurement 1.0 when most of your peers are on Procurement 2.0 and the leaders are starting on the Procurement 3.0 journey. (As per another recent post, while there’s a lot of talk about Procurement 4.0, we won’t see it for another 8 years based on history. 1.0 started around 97 with FreeMarkets and the emergence of stand-alone players. 2.0 started around 2007 with the first mini-suites [S2C or P2P]. 3.0 began around 2017 with the rise of the true [mega] S2P suites and integration that allowed for the pursuit of value where the whole is greater than the parts. 4.0 will began around 2027 based on the rate of historical development.)

But it’s not necessarily more than you will need in time. Especially if you want to reach the height of Procurement 3.0 with your peers when it materializes later next decade.

But we do recognize that you won’t need it all today. So what do you really need to look for in the first go-round? Especially if you can’t have it all or can’t become enough of an expert to evaluate it all?

While the most important capabilities do depend on the specifics of the technology you’re buying and the problem you need to solve, there are a few general capabilities that need to be there regardless, and these * capabilities in particular must be there in every solution you buy if you want to have any hope of “future-proofing” your platform.

  • Configurable Workflow
    Preferably with RPA support. Let’s face it, whatever process you use today won’t be the process you use tomorrow, especially as you mature in your processes and best practices, the partners you work with change, and governmental regulations continue to change the way you have to report.
  • Open / Extensible API
    that supports both 3rd parties integrating with your platform and the development of interfaces to integrate with third party platforms through their open API. Your platform will never do everything, no matter how much you want it to. It’s software, not sorcery. So the ability to extend it with ease is critical.
  • Dynamically Extensible Data Model
    that you can do, not a third party or the provider. Because you never know every piece of data you’re going to need until you need it.
  • Globalization Support
    including the ability for a user to select their language and overrides, the organizing to define new currency exchanges and projections, and IT to define where the application instances are hosted and where the data is stored (which may need to be segmented for a global organization)

This is not to say that other technical requirements are not important, but that without these, the life expectancy of your platform is limited, to say the least.

What Elements Should You be Looking for In a Platform? Part II

That’s a very hard question and, to some extent the key elements will, at least in many views, revolve around what you are looking for the platform to support, but there are some elements that should be part of your S2P platform regardless of where your solution focus is.

What are they? Where can you find some hints? For starters, you can loo to the new version of Solution Maps, designed by the doctor, with initial results releasing in less than two months, which have refactored all of the maps to have a new Common *platform* section (as well as a new common section for Sourcing – SXM due to the large overlap between the requirements and today’s platforms) which focuses on areas that are critical to S2P success regardless of your focus.

This new Common section is broken down into five categories

Analytics
Configurability
Supplier Portal
Foundational SXM
Technology

And they key requirements for any platform can be found in these four categories

Analytics
Technology
Configurability
Supplier Portal

In our last post we analyzed analytics and technology. In today’s post we are going to look at configurability and the supplier portal, both of which are also vital to ANY S2P application, whether best of breed, mini suite, suite, or next generation platform.

Let’s start with configurability. It has five critical sub-categories:

Globalization

Sourcing is done over global supply chains so global support for languages, currencies, data exchange, and data protection is absolutely vital.

Organizational Modelling

The application needs to support accurate organizational modelling to allow for selection of proper delivery addresses, identification of appropriate personnel associated with a location, identification of the right accounting structures (for the local country), etc.

Personalization

When it comes to usability, there is no one size fits all view. The CPO needs to see summaries and critical issues when she logs in, the category buyer needs to see a snapshot of current category performance, current projects, related issues, and so on. The CFO only cares about the financial summaries and impacts. And so on. And no one wants to click around for 5 minutes to find the information they need – they want it in their face when they log in. A good measure of a modern application is not how long the user is in it, but how long they aren’t in it. From a user’s viewpoint, as Weird Al so eloquently put it two decades ago, “it does all my work without my even askin’”.

Project Management

These days, users don’t have tasks to do, they have projects to manage. RPA was built to do mindless, repetitive tasks. And that’s what the system should do, guiding the buyer through the project to allow her to focus on the strategic decisions and relationships.

Workflow

A modern S2P application needs some workflow support that allows it to adjust to the needs of the user and the senior administrators to pre-define common workflows to optimize user productivity.

Similarly, every application that collects or stores supplier data needs to provide great capabilities around

Document Management

Business is captured in documents of all shapes, sizes, and types … and these come from both parties, not just the buyer – it must be easy for the supplier to get and put these with ease

Profile Management

A supplier must be able to maintain, or at least easily submit updates and corrections to, their profile. The whole point of a portal is to enable the supplier and ease life on the buyer.

And, of course, as we dive into each of the main areas of S2P, there are other core features, but these foundational elements need to be addressed before any vendor can offer a great best-of-breed point based solution, mini-suite, suite, or platform.